Concept

Sector rotation

Money shifting from one group of sectors to another over time, so the sectors in the lead change. Leadership might pass from technology to energy, for example, or from the largest companies to the average stock.

Why we track it

Which sectors take over the lead can say something about the market's mood, such as whether investors are reaching for growth or looking for steadier businesses.

Asset allocationHow a portfolio is split among kinds of investments, such as stocks, bonds and cash.
BacktestingTesting an investing rule on historical data to see how it would have performed before putting money behind it.
Basis pointOne hundredth of a percentage point (0.01%), often written bp.
Bear marketA fall of roughly 20% or more from a recent peak, usually over several months.
Bull marketA long stretch of rising prices across a market, often dated from a 20% rise off a low.
Business cycle stagesThe economy’s long rise and fall: years of growth, a slowdown, sometimes a recession, then recovery.

Why we track it

Related terms