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If there is one sector that has been making the most out of the surprise Trump election win, it has to be the financial sector. Stocks of banks, insurance companies and asset managers have gone gangbusters since November.

The sector – as represented by the Financial Select Sector SPDR Fund (XLF) – is up a staggering 21% since the election.

Those gains have been driven by the promises made by the Trump campaign to end pieces of recession-era regulation. The continued rise in benchmark interest rates hasn’t hurt either. With these two points, the financial stocks certainly have the wind at their backs.

With financial stocks being up so much only on promises and no real policy action, are investors banking on too much from the sector? Have we put too much faith in the future to the point where financial stocks may have overextended themselves?

Plenty to Celebrate… to a Point

After imploding during the recession, the major banks and financial stocks spent much of the last seven years or so treading water. All of that changed when two of the major catalysts holding them down were removed.

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