After a long-standing overweight in the health care sector, the Harrington Wealth Management Investment Committee has decided to shift to a market-weight position. The defensive nature of this sector has served well throughout the downturn, and while the economy has not yet turned upward, the rate of deterioration has slowed, causing the forward-looking stock market to favor more cyclical sectors in anticipation of recovery. This combined with the political risk associated with the sector has led us to bring the allocation back to a neutral allocation.
It is important to note that we are not negative on the health care sector and continue our view that an aging demographic will be positive to the sector over the long-term. However, we believe a more market neutral sector allocation is appropriate. The Committee has decided to move the allocation in the Vanguard Healthcare Fund to the Vanguard Total Stock Market Fund.
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