What is your favorite sector? James: Our research suggests overweighting the basic materials sector, with a special emphasis on the precious metals area. What sector or stock would you avoid? James: Our data suggests underweighting the energy sector. Unlike many of the prognosticators, we think the economy still has yet to recover. This equates to lower demand and lower energy prices. We would not be surprised to see oil once again trade below $40 a barrel before the economic downturn is complete. Additionally, Washington's "cap-and-trade" ideas, which would provide a questionable benefit on the climate-change equation, would have a definite negative effect on earnings in the energy sector.