It’s definitely risky to engage in sector chasing. I put a little money in VOX, a telecom sector fund, which promptly went down and then was converted into a FANG fund (minus the A) right when Facebook was at a high it hasn’t (and won’t ever) recovered from. This was a sector level reorganization based on changes to the MSCI US Investable Market Index (IMI)/Communication Services 25/50. The result is that the high dividend, low grown telecom stocks became low dividend, low growth (because they’d peaked) stocks. I’ve sold about 1/3 of it at a loss to balance out my taxes. Again, no big deal. Would have been much better to invest in VTI, but if I can’t take a $30,000 loss in my portfolio I shouldn’t be FIRE’ing.
Conversely, I had invested a bit more in VCSAX, the consumer staples fund, which was dragging for the last few years. When I started with it in 2016, I expected the economy had run the cycle and, given that bonds were no safe haven, I’d do well with all the good things people need to stay alive, potato chips, soda, and cigarettes, etc. By this point bond funds were a real loser so I didn’t want to diversify that way. I hadn’t banked on Trump giving the economy a sugar high by lowering taxes on corporations. But now that the Trump economy is having its senior moment, it’s really started to pick up, so I’m happy with it.