How Single Stock Investing Can Refine Your Portfolio

How Single Stock Investing Can Refine Your Portfolio

If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below.
Sources: Ycharts.com, Maya Joelson
If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below.
If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below. If you are the type of investor that has been investing in ETFs, mutual funds, and target date funds, the COVID-19 environment should make you reconsider your investments and be more strategic – it could have a powerfully positive impact on your portfolio. As of this writing, many of my clients’ equity positions are up for the year. As an economist, I’ve always rejected the idea that it is impossible to predict, or at least form an educated opinion, about the profitability of different sectors.  If profitability prediction is impossible, we have been wasting time studying economics and applying business strategy like Michael Porter’s Five Forces. When I transitioned from being a macroeconomist at a global mining firm to a financial advisor, I warned the attendees at my Harvard Club lecture in 2015 to stay out of energy stocks.1 Had you followed this advice, your equity portfolio would be 7% higher than if you had stayed invested in energy, even before this week’s monumental energy collapse.2  It was clear to anyone who understood the oil markets that demand had eroded as China’s infrastructure build receded and oil supply blossomed particularly with the US shale industry.

Stocks not Sectors

Now, it should be clear to everyone that entire industries across the economy – airlines, hotels, brick and mortar retailers, and more – are facing monumental negative demand issues and some are facing bailout, bankruptcy, and permanent closure.  So, why would anyone want to be invested in a broad ETF or mutual fund which includes all these companies facing the precipice? Per my analysis below, even if you had streamlined and just bought sector ETFs of the top two performing sectors of Health Care and Consumer Defensives, you still would have lost -9% this year, compared to -14% for the S&P. That’s better, but no cigar. Alternatively, you could have invested strategically in stocks across every industry – and thus had been very diversified – and been significantly up for the year. An easy case in point is had you been invested in Amazon, you would be up 25% for the year but had you invested in its sector ETF of consumer cyclicals, you would be down -34% as off-line retailers shut. This is true across every sector as can be seen below.