It’s an obvious formula. But it works.
“There are nine sectors that you can buy in the S&P 500,” said Hedgeye CEO Keith McCullough on The Macro Show earlier today. “If you want to beat the S&P 500, own the four or five sectors that are going to outperform, and be underweight the things that are going to underperform.”
Simple. But easier said than done. Unless of course, you have a repeatable process for identifying winners and losers.
We do.
Right now our proprietary GDP tracking algorithm says U.S. economic growth is heating up. Inflation, meanwhile, is cooling down. We call this ‘Quad 1.’ Historically, this has been the best environment to own U.S. stocks.
Here are the sectors that outperform in Quad 1 and what you should be buying today’s in stock market pullbacks. McCullough ranks his favorite longs and shorts in the video above.
Below are today’s buys:
- Technology (XLK)
- Consumer Discretionary (XLY)
- Financials (XLF)
- Healthcare (XLV)