138 The Sector Strategist Investing in the Financial Sector The financial sector should be the smallest exposure of any sector, from a 2.5 to 5% segment in your overall portfolio. The sector provides an excellent low cross-correlation with other sectors despite the lowest overall return. Selection within finan- cials should cover the broad range of sub-sectors previously listed. Three to six stocks should be chosen from this list. In choosing an individual stock from the financials list, consider the following: & & & Broadly diversify among the various sub-sectors. Any con- centration should be on the largest and best-capitalized banks. Select companies of a large size (5 billion market cap >). Seek out firms with low volatility or beta to further reduce the risk component of the sector.