In unstable markets, smart traders only choose shares – they rotate areas. In this strategy, capital goes between different industries based on macroeconomic cycles.
For example:
- During the interest rate cuts, technology and consumers’ discretionary shares perform better.
- As inflation increases, energy and objects usually lead.
- In the fear of recession, health services and tools become safe games.
Use devices such as sector ETF (XLK, XLF, XLE) to monitor the cash flow. Follow the earnings season and change the Fed policy carefully – they often trigger the beginning of new rotation. Adaptability is your strongest edge.