SweetSpot® Investments LLC

The Sweet Spot in Stocks

The sweet spot as it applies to stock investing was described by Harry S. Dent in his book, The Next Great Bubble Boom (pp. 211-212). Referring to returns and risk measures for the various broad stock-investment styles from 1975-2001:  “… [W]e can see… the advantage to investors of having been in the best asset classes when they were leading. Note that not only are the average annual returns very high when a sector is leading, but the risks are relatively low and sometimes very low. This violates the basic principle that higher returns entail higher risks. Over time that is true, but when an investment sector is in its ‘sweet spot’ you get the highest returns and the lowest risks. But these periods typically last only three to six years.”