What is sector rotation? And how can an investor identify this phenomenon to make profits in the stock market?
Simply put, it helps bull markets run longer. Why?
When one area of the stock market goes on a big climb, investors naturally become reluctant to buy at higher prices. They take profits and reinvest the capital in another promising field. The sun rises in the U.S. and Canada during the morning, then sets in the evening. But the sun then begins to shine in the Asia-Pacific region. Then it travels to Europe, Africa and South America. A good bull market acts in a similar way.