Sector Rotation

What does this tell me? This chart ranks every sector from #1 (best) to #12 (worst) each year. Notice how the top performer changes constantly — last year's winner is often next year's loser. This is called sector rotation. What should I do with this? Don't chase last year's winner. The data shows that leadership rotates. Piling into a sector just because it was #1 last year often leads to disappointment. Diversify across sectors. Since no one can predict which sector will lead next year, owning a broad mix (or VTI, the total market) smooths out the ups and downs. Look for consistency, not just #1 finishes. A sector that regularly finishes in the top half may be a steadier performer than one that swings between #1 and #12. Remember: If picking the winning sector each year were easy, everyone would be rich. History shows that broad diversification beats guessing.
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Leadership Count

How many times each sector finished #1, top 3, or bottom 3 over the selected period.