Sector Rotation

Sector rotation is when investors shift their money from one industry group to another based on where they think returns will be better. You'll hear about it during economic cycles—as conditions change, some sectors (like tech or energy) become more attractive than others. It matters because spotting these shifts early can help you position your portfolio ahead of the crowd. For example, if an investor thinks inflation is cooling, they might move money out of defensive sectors like utilities into more growth-focused areas like consumer discretionary. It's basically the art of being in the right industry at the right time.