Over the past 10 years, through April 2014, equity energy stocks led all major Morningstar fund categories with annualized returns of 11.1%, while all domestic equity funds returned an annualized 7.9% on average. Is it time to trim allocations to energy stocks? Contrarians might favor moving money into 10-year laggards like precious metals (annualized returns of 5% for this fund category), financials (3.1%), or Japanese stocks (1.9%).

Then again, they might not. “I'm not sure that I would agree with the concept of buying Japanese shares,” says Steven Jon Kaplan of Contrarian Advisors, a wealth management firm based in Beverly Hills and New York. “I also favor energy shares; recent strength should not be a negative factor as long as much greater gains likely lie ahead.”

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