By Yale Bock
NEW YORK (AdviceIQ) -- Many of the biggest-winning stock sectors of 2013 are the largest losers this year. This reversal stems from a move from last year's predominantly risk-on thinking (confident investors opted for riskier stocks) to the current, more pessimistic risk-off outlook.
Your response to this turnabout should be to ignore the temporary gyrations and analyze these stocks deeply before you buy, sell or hold them.
The retreat of the Federal Reserve's bond-buying program and turmoil in emerging markets get the blame for the 2014 stock market's rocky start.
It's stunning how the Standard & Poor's sectors that tore up the track are suffering lately. To be sure, the 2013 double-digit gains are only single-digit losses in 2014, and may well flip back again as the year goes on.
Consider consumer discretionary stocks, which are goods and services that people do not require to live, ranging from big-ticket items such as autos and refrigerators to less costly things such as clothing and services such as hotel stays. Last year, this category was No. 1, with a 41% return. This year, the sector is the worst-performing, down 8.5%.
On the other side of the spectrum, utilities, the 2013 laggard (gain: 8.8%), has done the best in 2014, up 2.2%. Utilities seldom lead the list, as they are slow-growing and heavily regulated. Their dividends are nice, a sure sign of a mature industry. Their relative safety is appealing lately, though.
The exception to this role-reversal story is health care, the No. 2 performer of 2013 (up 38.7%). Well, it still is No. 2, at minus 1.1% this year. That it has held together so well is a bit surprising, considering the messy Obamacare implementation.