Sector Rotation: Declining Oil Price Boosts Retailing and Automotive Stocks

The price of energy-related commodities, such as light crude oil, experienced a sharp short-covering rally at the beginning of the week, but the downtrend appears to be resuming again:

oil

As consumers save money at the gas pump, they have more disposable income to spend at the shopping mall or to purchase merchandise online, which boosted the earnings prospects of companies in the retailing sector. The Fidelity Select Retailing Fund (FSRPX) is an excellent way to take advantage of this trend:

fsrpx

Car company stocks also responded positively to declining energy prices. Should this trend continue into the summer months, the strategy of overweighting the Fidelity Select Automotive Fund (FSAVX) and underweighting energy stocks may offer the most optimal portfolio allocation approach:

fsavx

 

fsenx

Read more about investment strategies at FidelitySignal.com

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One thought on “Sector Rotation: Declining Oil Price Boosts Retailing and Automotive Stocks

  1. Pingback: Sector Rotation: Technology Sector Outperforms in 2015; Avoid the Utilities and Natural Resources Sectors | Fidelity Trends

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