Market Digest \u2013 Week Ending 8\/26\r\n\r\nAfter reaching a new intraday high on Tuesday, the S&P 500 gradually fell over the course of the week. Softer economic data from Germany led foreign stocks lower, with gold and commodities also down. It was a fairly uneventful week from a news perspective, with most investors focused on Janet Yellen\u2019s comments from Jackson Hole on Friday. While still leaving herself an exit, she indicated a rate hike is increasingly likely in coming months on continued strength in the labor market.\r\n\r\nWeekly Returns:\r\n\r\nS&P 500: 2,169 (-0.7%)\r\nFTSE All-World ex-US: (-1.1%)\r\nUS 10 Year Treasury Yield: 1.63% (+0.05%)\r\nGold: $1,321 (-1.1%)\r\nUSD\/EUR: $1.120 (+0.6%)\r\n\r\nMajor Events:\r\n\r\n\u2022 Monday \u2013 The US national security regulator approved ChemChina\u2019s $43 billion acquisition of Syngenta, although the deal still faces EU scrutiny.\r\n\u2022 Tuesday \u2013 US new home sales increased in July to the highest level since 2007.\r\n\u2022 Wednesday \u2013 German GDP slowed to 0.4% growth in the second quarter, due mainly to lower investment.\r\n\u2022 Thursday \u2013 The IRS extended the 60-day rollover period for IRAs if one of eleven new exceptions is met, such as serious illness or a misplaced check.\r\n\u2022 Thursday \u2013 US jobless claims fell for the third consecutive week, showing continued strength in the labor market.\r\n\u2022 Friday \u2013 In Jackson Hole, Wyoming, comments from Fed Chairwoman Janet Yellen indicated a higher likelihood of a rate hike.\r\n\r\nOur take:\r\n\r\nShould you own stocks in the same sector you work in? In an increasingly popular trend, many investors are beginning to exclude such sectors from their portfolios. The logic goes as follows: you work at a technology company, so your job, salary and ability to save are dependent on said company. This means if the technology sector falls on hard times, your job could be at risk. And if this was the case, why would you invest in a bunch of technology stocks? You don\u2019t need to lose your job and your investments. Seems reasonable, right?\r\n\r\nWell, the logic is sound, but it\u2019s not that simple. Sectors have become increasingly diverse. Just because the semiconductor industry goes through a downturn, it doesn\u2019t mean a Google employee is at risk of losing their job. Likewise, an employee at Lockheed Martin isn\u2019t necessarily at risk should demand for package delivery wane, yet both are in the same economic sector. So by placing blanket sector restrictions, investors could be leaving returns and possibly diversification benefits on the table.\r\n\r\nIt certainly makes sense not to load all your eggs in one basket. So if you work at Google, you probably don\u2019t need to own excessive amounts of Google\u2019s stock in your portfolio. But before you restrict an entire sector, ask yourself a few questions:\r\n\u2022 Are most of the stocks in my sector highly correlated to one another?\r\n\u2022 In a downturn, is there a high likelihood I could lose my job?\r\n\u2022 If I lost my job, would it be difficult to find another quickly?\r\n\u2022 Do I have upcoming cash flow needs from my portfolio?\r\n\r\nIf the answer to most of these questions is yes, then it might make sense to restrict an entire sector. But if not, you may just want to avoid loading up on your own company\u2019s stock, or possibly a handful of stocks within a more focused area of the sector.