The indices are misleading. It's like using Shaquille O'Neal and Alan Iverson as a gauge for the average height of an NBA player. The indices don't give a accurate picture of what really constitutes a stock market. It would be best for investors to look at the perennial growth categories like technology, pharmaceuticals, financial services and the general consumer sector. Right now, technology presents the best opportunity since 1996.
Prices are down, valuations are down and, more importantly, expectations are down.
That creates real opportunities for investors. The pharmaceuticals will benefit from the aging of baby boomers and their expanding health care needs. As the economy grows and spurs economic growth abroad, the financial service providers will be the beneficiaries. So these are good growth areas to be in. I believe this group may offer outsized returns over the next 12 months given the group's historical tendency to outperform following recessions.