This week's PortfolioDirect investment report has again noted the high churn rate and disparity in returns underneath the apparent stability in sector indices

This week's PortfolioDirect investment report has again noted the high churn rate and disparity in returns underneath the apparent stability in sector indices. The analogy with sector positioning in 1998-2002 is intact. The tendency for this week's winners to be last week's losers and vice versa impacts investment decision making. One implication: investors should take profits where they arise. Staying will leave investors at risk of subsequent losses for even the most highly prospective development opportunities. Conversely, companies which have already made relatively strong near term gains should be avoided. A policy hiatus is partly the cause. China, Japan, Europe and even the USA are struggling to define positions with the potential to have a direct bearing on sector attractiveness. Similarly, several developing economies, including India and Brazil, are moving through policy transitions with the potential to impact sector investment outcomes.