Every day, many highly paid people on Wall Street try to predict where the stock market will be in two hours, a week, a month, six months. It can all make for entertaining reading for the average investor. But is it relevant?

Not if your stock holdings are primarily long-term investments. Long term means different things to different people, of course, but if you can say that you are investing for at least five years from now, you are a long-term investor. Your goal, then, should be to maximise stock returns over that extended period. If you want to earn the highest possible returns between now and mid-2004, which stock market sectors should you be in today? Without help from the Psychic Friends Network, many investors attempting to identify the next market leaders (and laggards) will end up basing their decisions on recent history. If a stock sector has been hot lately, then it might very well stay hot. And if a sector has been cold, it might remain cold. This is essentially "momentum" investing - following the herd rather than going against it and this can be a profitable strategy because once a trend is established it can stay in place for a long time. What about the next five years? Do you stick with the leaders of the last five years - or buy the laggards?

Certainly, the biggest difference between now and 1994 is that stock valuations are so much higher, especially for favoured groups such as technology, healthcare and blue chips. That means the risk in owning those hot sectors also is higher. But if you are truly investing for 2004 or beyond, giving up now on technology seems silly. Will the world want less technology five years hence? You can argue the same for healthcare and for financial services. Long-term, these are still great growth industries.