What Sectors Work Now?

The major stock averages in the United States have clearly entered into bear territory, but the question that remains is if anything in these markets work right now. After listening to many experts there seems to be a consensus that health care and energy are performing comparatively well right now, with financials dragging down the market.

Personally I'm not sold on health care since consumer's budgets are becoming tighter and health care related inflation is a main concern for the entire sector, however companies that produce supplies for health care related businesses will handle this bear market fairly well in my opinion.

Energy is a no brainer right now with oil reaching a new high of 147.27 today during trading. The recent rise in crude prices has been largely due to the tensions in Iran. We might see a slight pullback as tensions decrease however energy prices this high are going to create large profits for companies in the business. When they start reporting earnings in the next month these stocks should go even higher.

Some people, myself included, think that this downturn in the market has provided great opportunities for long term investing. Many sectors might not be yielding great returns for the 3rd quarter but in a year might appreciate in price. I think retail is getting hammered because of higher oil prices but as they decline their numbers should become better. However if oil falls $20 a bbl then we should see some relief in these stocks. The sector I like best for the long term (1-2 years) is industrials. Continued demand from overseas and a weak dollar is going to help generate better earnings for the future. Companies like Boeing (BA) and United Technologies (UTX) have fell recently offering great deals on quality stocks.