Don't Chase Hot Stocks or Hot Sectors

Internet companies in the 1990s, Real Estate companies in the 2000s, Energy companies, Biotech companies, Semiconductors.  Every few years there are a few investment sectors that get really hot.  They seem to keep going up forever, and all you can think is, why did I miss out on all those gains?  Well, don't think that way.  By the time everyone realizes that the sector is hot it is usually too late to make money on it.  In fact, by the time everyone buys into the sector being hot, it is likely that you will lose money on those investments. Think of Internet and tech stocks after the 2000 bust.

Stick to a well balance portfolio of all types of stocks, funds and investments.  Rebalance your portfolio often, and if it makes you happy, use a small percent of your portfolio to invest in hot sectors.  Just be careful not to get too invested.