There's lately been a lot of talk about problems in the financial sector. But if you dig below the surface and look at the relative performance of certain groups, it seems clear that investors believe banks are at the center of the storm.
Why? Because bank shares have not only lost ground vs. the broad market, they've also lagged behind other financials.
During the past 12 months, the KBW Bank Index -- which has an equivalent exchange-traded fund SPDR KBW Bank (ETF) (
Recent disappointing results from Citigroup Inc. (NYSE: C) and reports that large lenders are in talks to try and bail out bank-affiliated investment funds haven't made things any better.
While it is possible that at least some of the bad news is beginning to be factored in to the price of bank stocks, history suggests it might be best for investors to wait for a clear turnaround in relative performance before diving in.
Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle.
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