What are the hottest sectors in the stock market?
Leo: It will make sense to be overweight in economically sensitive segments of the market, such as the industrial and technology sectors. Knapp: Suppliers of raw materials are doing well. Investors may want to take a look at their holdings in the material sector. McDonald: We’ve tilted our portfolios toward industrials and basic materials stocks. We’re modestly tilted away from defensive areas, such as consumer staples, health care, telecom and utilities. Knapp: Most emerging markets are doing well—boosted by business growth in China and India. The Asian market is at a three-year high. This engine has sparked economic activity in Europe, which is exporting more to Asia. It seems we’re finally getting world monetary policy under control, and accounting standards are more consistent around the globe. McDonald: As a result, we have recently increased exposure to international stocks. We’re now recommending that moderate-risk investors have 15 percent of their portfolios in this area—compa
