Selecting which sectors will be the best performers in the S&P 500 is an ongoing exercise, but never more so than near the start of a new year.

After record-setting market results this year, sector selection takes on added relevance.

In order of importance, equity portfolio results hinge on three elements: the direction of the stock market, sector concentration, and individual stock selection. The market’s direction and sector selection determine the vast majority of a portfolio’s return.

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