1. Financials and Information Technology were up 23% each. The sectors accounted for more than 50% of the gains in the S&P 500. Bank of America (BAC) and Citigroup (C) undoubtedly outperformed the markets last year, along with other banks. Despite having book values substantially higher than the share price, the unknown liabilities were enough of a reason to avoid these companies. Banks still need merger and acquisition (“M&A”) and other financing activities to truly grow. Bank of America spent 2012 and previous years cutting on costs.
2. Consumer Discretionary outperformed the markets by 790 basis points in 2012. Home Depot (HD) and Amazon (AMZN) were surprisingly strong performers. Home Depot could offer moderate performance this year, but a continued rebound in US housing could benefit the company.
3. Large Capitalization companies provided stability for funds. Companies like eBay (EBAY) and Gilead Science (GILD) were solid performers. Investors could anticipate these companies will continue to do well. eBay’s PayPal unit is a consistently strong performer, while Gilead keeps reporting good results from its drug studies. Other companies to consider Amgen (AMGN) and Bank of New York (BK).