Take Control of Your Cash Flow, and Energy Stocks on Fire
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What are the best performing sectors in the market this year?
Being intentional with your cash flow and the best performing sector of the past five years may surprise you. You're listening to the Saturday Personal Finance Edition of Motley Fool Money.
I'm Robert Brokamp, though my nickname here at The Fool is Bro. So don't be surprised if you hear colleagues call me Bro when they're guests on the show, including this week when fellow Fool employee and certified financial planner, Stephanie Marini, joins me to discuss this month's installment of our 2026 Financial Planning Challenge. But first, let's highlight some items in the news from this past week. You know, it's been an interesting year so far for investors. Many formerly high-flying tech stocks are taking it on the chin, while subsegments of the market are going gangbusters. For example, consumer staples are up 12% in 2026 as of the taping of this episode on the morning of February 5th, which trounces their meager 1.5% return in all of 2025.
But the best performing sector so far this year is energy, which is up more than 18% in 2026, driven largely by a spike in oil prices due to geopolitical tensions related to Venezuela and Iran. Despite the fact that AI and tech stocks have grabbed most of the investment headlines in recent memory, the energy sector has actually outperformed the tech sector over the last five years. Since early February of 2021, the State Street Energy Sector SPDR ETF, ticker XLE, has earned a total return of 169%, compared to 114% for the State Street Technology Sector SPDR ETF, ticker XLK. And an investment that hasn't had such a great five years is the bond market, which brings us to our next item. Charlie Bilello of Creative Planning posted on X that the Bloomberg Aggregate Bond Index has spent 66 months below its all-time high set in August of 2020.
It is by far the longest drawdown since the index was launched in 1976. The next longest drawdown was a dip that began in 1980 that lasted only 16 months. Of course, bonds pay interest, so the total return of bonds over the past five years has been about flat, maybe a little less. What explains this poor performance? Well, the level of rates five years ago. The yield on the 10-year treasury was 1.1%, driven historically low by the Federal Reserve and the bond market as the world recovered from the pandemic. The return from bonds over a period of five to 10 years or so is highly correlated to the level of rates at the starting point. So where are we now? The yield on the 10-year treasury is 4.3%, which is why most Wall Street firms expect bonds to return between 4% and 5% over the next several years.
And now the number of the week, which is almost 26 years. That's how long it took Cisco's stock to exceed its dot-com high of $82 reached in March of 2000. It dropped to as low as $10 a share in the subsequent bear market. But this past Tuesday, it finally exceeded $82. While we here at The Motley Fool like to point out that the overall U.S. stock market has always recovered from a downturn and usually takes only a few years, individual stocks are a different story. As we've seen with Cisco, it can sometimes take decades, but at least Cisco did recover. Many of the dot-com darlings eventually disappeared.
How can I calculate and automate my debt payments?
which is why we here at The Fool recommend that you own at least 25 stocks across multiple sectors. And I believe most investors in individual stocks should also complement that portion of their portfolios with a globally diversified mix of low-cost index funds. In fact, that's what I do. Next up, calculating and automating the amounts you need to save to accomplish your financial goals when Motley Fool Money continues. Evening.
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Chapters
8 chapters
1
What are the best performing sectors in the market this year?
0:05–3:24
2
How can I calculate and automate my debt payments?
3:24–5:19
3
What steps should I take to build a financial safety net?
5:19–7:18
4
How do I prioritize my financial goals effectively?
7:18–9:55
5
What strategies can I use to manage and pay off debt?
9:55–13:07
6
How can I set up an effective savings plan for emergencies?
13:07–15:59
7
What tools can help me track my spending and savings?
15:59–18:55
8
How can I automate my finances for better consistency?
18:55–20:10