Sector Rotation
Shifting among sectors to match the stage of the business cycle.
What is Sector Rotation?
Overweighting sectors expected to lead in the coming phase - cyclicals such as technology and consumer discretionary in early expansion, defensives such as utilities and consumer staples approaching a contraction. An active, tactical technique.
Sector Rotation: a worked example
Moving from consumer discretionary into utilities and healthcare as leading indicators roll over.
More terms in Clients, Strategy & Tax
Sole Proprietorship
A business owned by one person with no legal separation from the owner.
General Partnership
Co-owners share management and unlimited liability; income passes through.
Limited Liability Company (LLC)
Limited liability for owners with pass-through taxation by default.
C Corporation
A separate taxpayer - profits taxed at the corporate level, then again as dividends.
S Corporation
A corporation that passes income through to shareholders, avoiding double tax.
Trust & Estate Accounts
Accounts run by a fiduciary - a trustee or an executor - under a governing document.
Foundations & Charities
Tax-exempt organizations investing for a mission, often in perpetuity.
Client Profile & Data Gathering
The financial and nonfinancial facts every recommendation must rest on.