The trend is your friend. How many times have you heard that throughout your investing career? Once you hear something so many times, you stop paying attention to its meaning. How many times have you really invested in a trend? If you believe in the buy-low/sell-high strategy, then the answer is likely not often or never. Contrary to popular belief, the best investors and traders buy high and sell higher. When a stock or exchange-traded fund (ETF) is seeing price appreciation, it indicates heightened demand. And it’s very rare for that trend to change on a dime. If the trend changes, you should be able to see it with exhausted buying or selling.
With that in mind, we’ll take a look at the 10 hottest industries over the past year through July 28., 2015 (according to Morningstar). An analysis will also be provided on whether or not these industries are likely to stay hot and, if so, for how long. (For more, see: Top-Down Analysis: Finding the Right Stocks and Sectors.)
According to Freddie Mac, the national average on a 30-year fixed mortgage was 3.98% in June. This is extremely low on a historical basis, but it has been creeping higher. It was 3.67% in January. According to Bloomberg, the national average on a 30-year fixed mortgage currently stands at 4.01%. This is actually down from 4.26% on July 21, 2015, but this trend to the upside has made potential homebuyers nervous and forced them into action. When people buy new homes, they spend on those new homes, which includes home furnishings and fixtures. This trend should continue in the near future, but regardless of where mortgage rates stand, the housing market will not be capable of growth when deflationary forces hit. (For more, see: Mortgage Rates to Rise, But When and By How Much?)

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