Since the 3/23/2020 market initial bottom, the best performing S&P 500 Sector is the Energy Sector, it is up a whopping +43.90%.
I say it is sort of like the biggest laugh out loud situation because those in the know are fully aware that typically, the hardest-hit stocks/ETF’s are what usually bounces the hardest FIRST, not what held the best. Quite frankly, there is a HUGE difference between the strongest sectors and the best-performing sectors. Energy is the worst-performing sector on a one-year basis down -44.59%, but one man’s 1-year garbage is another man’s 3-month gold.
You need to be aware of your timeframe and stop intaking information on the surface without really digging in.
Would you rather own the strongest stock on a one-year basis or the best-performing stocks on a 3-month basis? Again is all about the timeframe.
You can see a similar dynamic in the best-performing stocks in the S&P 500 since the 3/23 bottom; the top names are some of the worst-performing stocks on a yearly basis. And I’ll give you a tip; the percentage gains and dollar gains from stocks that are trading near lows, below the moving averages, at 52-week lows, etc. are worth the same as stocks that are above the moving averages, trading at highs, etc.
The above information says nothing about what will happen in the future in the energy names; it’s an educational blog that is trying to get you to realize that sometimes conventional wisdom is not always correct and a lot if not all has to do with your timeframe.