Best Stock Sectors of 2013

The broader markets have had a strong year, but the best stock sectors of 2013 averaged gains more than twice as high as the Dow Jones Industrial Average.

For the year, the Dow is up 21%, the Nasdaq 33%, and the S&P 500 25%. But the top-performing sector of 2013 is up nearly 37%.

In fact, the top five sectors' year-to-date gains range from 23% to 37% - compared to a range of 15.2% to 27.4% for the top five sectors in 2012.

Here's the year-to-date performance for 10 major sectors, as well as a breakdown of price/earnings ratios and dividend yields.

Best Stock Sectors 2013: Top Year-to-Date Performance

ytd performance by secotor

Special Report: The market's most powerful trading indicator has delivered us triple-digit gains... Here's how to play it.

Best Stock Sectors 2013: P/E Breakdown

It can be difficult to compare stocks of different sectors on their price-to-earnings (P/E) ratios, since growth prospects for companies can vary greatly between industries.

Typically, the technology sector has a higher P/E ratio than others, like utilities, as technology companies traditionally have higher growth potential. For comparison, the S&P 500 has posted an average P/E ratio of 19.58 since 1998.

Here are the P/E ratios by sector this year:

PE ratios by sector in 2013

Best Stock Sectors 2013: Highest Dividend Yields

Those who invested in the telecom sector this year may have brought in the smallest gains, but they also brought in the largest dividend yields on average in 2013.

A hefty dividend yield can make even an uninspiring stock performance a worthwhile purchase.

Here are the average dividend yields paid out by each sector this year:

average dividend yiedls by sector in 2013

*All sector information as of 12/12/13 market close.

Money Morning Chief Investment Strategist Keith Fitz-Gerald found one chart that will save you from a dangerously popular investing delusion making rounds right now. Here's what you should do as we head into 2014...