If you were asked back in 2010 which sector of our economy would perform the best over the next five years, what would your guess have been? Multiple choice: Consumer Discretionary (businesses that sell non-essential goods and services), Consumer Staples (businesses that sell essentials), Energy, Financials, Health Care, Industrials, Information Technology, Materials (companies involved with discovery, development and processing of raw materials), Telecom Services, and Utilities. If asked to guess which sector has performed the best over the past five years, would your answer be the same? According to Bloomberg, Health Care has been the top performer dating back to July 31, 2010, providing an annualized return of 24.16%. Pretty good, considering all the uncertainty and controversy around Health Care reform. The other sectors’ five year average annual returns:

Consumer Discretionary: 22.66%
Information Technology: 16.67%
Consumer Staples: 16.42%
Industrials: 14.75%
Financials: 13.31%
Utilities: 12.14%
Telecom Services: 12.05%
Materials: 10.66%
Energy: 7.12%

Moral of the story…you never know. In another five years, this list will almost certainly not look the same. Don’t play the guessing game. Stay diversified.