11 Best Sectors To Invest In Heading Into 2023

With a recession on the horizon, many investors are cautious when it comes to putting their money in the equity market. However, although the S&P 500 is in bear territory, there are some sectors which are performing better than the others. In 2022, safe haven assets and defensive market sectors like utilities, healthcare, consumer staples, and gold have outperformed relative to the overall US market. The energy sector has also gained close to 50% year-to-date due to the Russian invasion of Ukraine.

Although defensive sectors are considered to be more lucrative investments heading into a recessionary environment, if the central bank manages to slow down interest rate hikes after achieving about 5.0% to 5.5%, then technology and high growth stocks can potentially recover. If that is the case, technology and semiconductor sectors are some of the ETFs that may outperform based on the sector rotation model.

Investing in exchange traded funds allows investors affordable access to legacy large-cap firms like AbbVie Inc. (NYSE:ABBV), NVIDIA Corporation (NASDAQ:NVDA), and ServiceNow, Inc. (NYSE:NOW).