Two pieces of news broke over the weekend, causing a stir among those in the big finance sector.

First, something concrete—the “tightening spell” on insurance companies trading stocks has been loosened. With this adjustment to risk factors, several hundred billion in real funds could be released into the market. The other piece is even more interesting—regulators are clearly aiming to “support the best,” meaning quality institutions can now use leverage, while the weaker ones are being told to stay out.

Friday’s rally injected a much-needed shot of adrenaline into this long-dormant sector. But looking at things calmly, we’re still in the early stages of a low-level rebound. If you rush in on a high open Monday morning? You might end up being the bag-holder. A more prudent approach would be to wait until the hot sectors start showing signs of internal competition and divergence—most likely on Tuesday—before considering a position. The risk-reward will be better then. After all, this sector has substance now, but the hype hasn’t truly kicked in yet.

Interestingly, while everyone’s focused on the surge in insurance stocks, few have noticed that securities firms are quietly making a killing.

The logic for insurance is straightforward: looser regulation plus a high probability of a Fed rate cut make high-dividend insurance stocks the top choice for risk-averse investors. One major insurer soared nearly 7% in a single day, with foreign investment banks even raising their target price, mainly because its policy structure is best positioned to benefit from this round of dividends. Another leading company jumped nearly 6%, with northbound funds aggressively buying in, attracted by its potential for simultaneous improvement on both sides of its balance sheet.

This round isn’t just about speculating on policy expectations—it’s about real, tangible improvement in earnings forecasts. As for how to pick stocks? A dual approach with insurance and brokerages is solid. Some leaders also have exposure to other hot sectors, and the more elastic plays are worth a look too—but remember, don’t let short-term price surges cloud your judgment.