It has been a record-breaking year for the stock market. For the most part, the S&P 500 has seen a steady climb throughout 2020, with a few volatile swings in between. And, as we approach the end of the year, many investors are looking to capitalize on the Bullish trends that have brought the markets to record highs.
As the rally progresses, it is important for investors to look for the right combination of both value and momentum. The focus should be on three different sectors: Technology, Healthcare, and Consumer Discretionary.
Technology is a sector that has been particularly booming in 2020, thanks to the rise of cloud based software and consumer products. Some of the biggest names in tech, such as Amazon, Apple, and Microsoft have seen huge stock gains this year, and these gains are expected to continue. Also, it is important to note that tech stocks are still trading relatively cheaply compared to other sectors, giving investors more buying power.
The healthcare sector has also been on a tear this year. This sector has benefited from companies creating innovative treatments for Covid-19 and other life-threatening diseases. Additionally, the sector has seen increasing investor interest due to the election of a Democrat-controlled congress, which could mean additional spending and subsidies for the healthcare industry. Pharmaceutical stocks, such as Moderna and Gilead, are worth looking into.
Lastly, the consumer discretionary sector is poised to end the year on a high note. This sector includes everything from apparel and travel to restaurants and entertainment. Companies in this sector have seen some major fluctuations due to pandemic lockdowns, but with the rollout of a vaccine, it is expected that these stocks will recover. Some of the top names to watch in this sector include small-cap and mid-cap companies, such as Shake Shack and Churchill Downs.
All in all, this year’s market rally has been strong, and investors should look to capitalize on this trend. Combining value and momentum is key, and the tech, healthcare, and consumer discretionary sectors should be watched for potential gains. As the year wraps up, these three sectors will continue to be a great opportunity for investors looking for strong returns.