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What Sector Rotation Is, and How Investors Use It

Sectors and Industries • Beginner Investing • 6 min

Sector rotation is an investing strategy built on a real, historically-documented pattern: different sectors have tended to lead and lag at different points in the economic cycle. "Cyclical" sectors (like Industrials or Consumer Discretionary) have historically tended to perform relatively well during an economic expansion, since their revenue and profits are more sensitive to overall economic growth. "Defensive"…

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