The Financials sector ranks last out of the ten major sectors as detailed in our sector roadmap. It gets my Dangerous rating, which, like my fund ratings, is based on aggregation of stock ratings for each of 563 companies in the sector. The Financials sector is the bottom of the sector barrel.
For those investors interested in rigorous research, I offer my roadmap to the best stocks and funds in the market by sector. The full sector roadmap is here.
As one financial scandal follows another, it seems the good guys are having a tougher time catching the bad guys. Recent revelations about MF Global’s ponzi scheme are another reminder of how our regulatory and oversight systems seem to let whales pass through their net.
There are 25 financial sector ETFs. Per Figure 1, these 25 ETFs have drastically different stock holdings and, therefore, allocations. The lowest number of holdings is 24 while the highest is 496.
For starters, investors interested in the financial sector cannot expect many good investment options given that the sector gets my “dangerous” rating and ranks ninth out of the ten sectors that make up the economy. Details are in our sector roadmap report.
The consumer staples and information technology sectors are tops among the ten major sectors. Both get our “attractive” rating. Our Sector Roadmap report ranks and rates all of the 10 sectors. It also benchmarks all sectors against the S&P 500, which gets our “neutral” rating and the Russell 2000, which gets our “dangerous” rating.
When Morgan Stanley (MS) started in 1935, there were around fifteen employees. For 2010, the company reported 62,542 employees. Bigger is not always better. And for big, publicly-traded companies, big tends to be worse especially when it comes to financial reporting.
David Trainer, Founder & CEO
