Everyone knows that markets ebb and flow in bull and bear market cycles. But individual sectors tend to drive these changes, sometimes almost entirely independent of the broader market trends. When markets rise sharply, it’s easy to lose sight of what’s really driving the gains. Often, it isn’t the whole market at all–it’s a handful of sectors pulling the weight. Understanding which parts of the market are doing the heavy lifting–and why–helps investors stay grounded when the headlines make everything look easy. If a portfolio is heavily exposed to one or more hot sectors, the portfolio itself can experience strong gains, but by itself, performance it tells you nothing about the future – both for the sectors that performed well, as well as the ones that didn’t. While an in-favor sector can deliver strong results, they also pose a less obvious risk: they can distort your perception of performance, risk, and your personal expectations. In recent years, financial markets have seen waves of sector-driven rallies, particularly in areas like technology, AI, and green energy, among others. Let’s first take a look at sector performance over