You already know about diversification. You’ve set your investment goals, picked a benchmark, and decided on the weighting of your allocations. Now, it’s come down to selecting the assets—stocks or ETFs—to build your portfolio. As a long-term investor with moderate risk tolerance, how might you build a portfolio to withstand market drawdowns and weather the business cycle? There are many ways to do this. Here are a few ideas to consider. S&P Sectors: How Are They Performing and Where Are They Going? FIGURE 1. RRG CHARTS OF S&P SECTOR ETFS RELATIVE TO THE S&P 500. This image shows you the one-year progression of each sector, indicating the stage of leadership they might be headed. If you’re looking to diversify by sector, it helps to know where each one has been, performance-wise, and toward what state of leadership they might be entering. Which stocks are Improving, Leading, Weakening, and Lagging? This…
