course, housing the sector rotation within a tax-sheltered vehicle such as an Individual Retirement Account negates the tax hit.
What’s more, if you’re doing the job yourself, it requires a steely discipline that’s not as needed in the buy-and-hold approach. Successful investors must actively research and cull those sectors facing the economy’s headwinds, and snap up those with more promise. “If you do that, and you are more right than wrong, you increase your probability of beating the market over a longer time horizon,” Subramanian says.
INDUSTRY INSIGHT
| Â |
Total Return (%) |
 | |
| Industry | 3-Month | 1-Year | 5-Year |
| Biotechnology | -0.8 | 13.3 | 26.5 |
| Chemicals | 0.1 | 27.3 | 21.9 |
| Drugs | -10.8 | -1.5 | 6.1 |
| Gold & Silver | 35.5 | 71.0 | 31.2 |
| Homebuilding | 2.7 | -41.9 | 2.5 |
| Household & Personal Products | -7.8 | 7.9 | 12.3 |
| Oil & Gas | 2.4 | 38.0 | 32.1 |
| Regional Banks | -3.7 | -21.5 | 6.7 |
| Restaurants | -10.3 | 4.7 | 22.4 |
| Semiconductor Equipment | -9.2 | 10.9 | 15.9 |
SOURCE: MORNINGSTAR DATA AS OF 3/14/08