The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
By David Sterman
NEW YORK ( StreetAuthority) -- Every few months, hedge-fund managers take a fresh look at the economy, trying to figure out key trends that will yield the best returns in the months ahead. Once they complete their analyses, they rotate some money out of sectors that no longer appeal into sectors that provide the freshest upside.
With 2011 winding down, this is a good time for individuals to anticipate where the action will be later this winter, and on into the spring and summer.To be sure, as I've
1. FinancialsThe crisis in Europe has been especially hard on banking stocks as fears of a Lehman Bros.-like contagion began to build. A typical financial services stock fell roughly 10% this year, but many within the group fell far more sharply. We've discussed the merits of Warren Buffett's favorite bank stock, Wells Fargo (WFC), but I
2. IndustrialsThis group rebounded nicely from the March 2009 levels, but many key stocks have slipped considerably after peaking this past spring. Stocks such as Deere (DE) and Schlumberger (SLB) have slid 25% from their peaks, even with their long-term outlooks remaining quite bright. Yet for my money, the biggest gap between investor perception and reality can be found among automakers and auto-parts suppliers. These companies emerged from the 2008/2009 economic downturn in far stronger shape, and even though they're well up off the lows seen back then, they're also well below their recent highs.
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