The S&P 500’s performance this year, coupled with softness in key leading economic indicators, has reminded investors that there’s no such thing as a gravity-less rainbow. But savvy investors can take advantage of the selloff to find a real pot of gold.
Baseball Hall of Famer Wee Willie Keeler’s famously advised, “Keep your eye clear and hit ‘em where they ain’t.” This motto has an important corollary for investors: Buy what’s unpopular and hold the stock until the market discovers its value.
Investors preference for low-beta names and dividend payers has pushed valuations of consumer staples and other safety-first fare to frothy levels. Our favorite cyclical sectors, on the other hand, sport favorable valuations and solid upside potential.
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