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Markets
Sector Rotation Is Mostly a Myth
The story is clean. The data is not. Most sector-rotation strategies underperform a boring total-market index after costs.
Academic studies of momentum-based sector rotation show alpha in backtests that mysteriously vanishes out of sample. Survivorship bias, look-ahead bias, and transaction costs eat the rest.
The honest reason to overweight a sector is structural conviction held for a decade, not a chart pattern from last quarter.