The Key is to Take Action Now
Don’t wait for the Fed to officially raise rates, as research shows that investors get the most benefit from materials and energy stocks by getting in now. Take a look at William O’Neil & Co.’s table below, which illustrates how critical it was to be invested in commodities before rates increased.
The firm looked at individual sectors, such as retail, technology, and utilities, along with broad indexes, including the S&P 500 Index, the Dow Jones Industrial Average and the Nasdaq over four decades. It calculated the gains not only received during the period of the rate increases, but also six months prior to the initiation of rate increases.
In every instance, the energy sector performed “extremely well during these periods,” with basic materials also outperforming, says William O’Neil.