Tunnel Vision:
If one was to have been living under a rock since 2020 began, and they were to take a peek at the YTD returns of the 11 major S&P sectors, there probably would not have been much to be alarmed about, if they were to look at the table below. If they remained focused on the top four. From there, each of the groups have fell by double digits, and some of the moves have been breathtaking. Should one want to keep it simple, as should always be the case over complex, stay with what is working. That would be healthcare and technology, as they are by far the best actors. Healthcare being in the top spot, to some degree is the virus situation, and for it to be behaving so well in an election year is a tell. Technology, mainly software and some select semiconductors has been the place to be. Is there a concentration of names that are working? Of course, and one would like to see more participation, but that is precisely why there are a few “chosen” leaders, and why their strength seems to perpetuate. The better they do the more capital they attract, and the less that is allocated to the pedestrian, ordinary stocks. Capital flows to where it is treated best. Always has and always will be, and if the list is shorter than normal so be it. It will keep working until it does not.