With the ever-rising share of passive investors on the market, we’ve seen a clear trend. The correlation between individual stocks has increased dramatically. For the investors, this means that the stakes for being in the right sectors are enormous.

Ibbotson and Kaplan, in their 2000 study, demonstrated that asset allocation…

In the past decade, there has been one sector that has clearly outperformed the market — technology. Much of that record-breaking performance has been witnessed in the past two years, and most importantly, the 2020 market recovery.

The relative performance of the market sectors from 2010 to 2020

Let’s look at some of the winners:

  • Facebook: up 50% in 2020
  • Amazon

It’s not a secret that the financial sector tends to perform exceptionally bad during the times of recession, and this time isn’t any different. We’ve seen that the financials index has severely underperformed the broader market, and we think that this trend is here to stay.

Performance of US financial companies compared with the broader market

The banking businesses have…

Kaloyan_Bernoulli

I’m an asset manager focused on long term investing. My investment strategy is to buy assets with a discount to NPV and a high dividend yield.

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