Sectors Overview:
Sectors - distinct categories or industries within the broader financial market, encompassing areas such as banking, insurance, investment management, and real estate.
There are 11 stock market sectors, as coordinated by the Global Industry Classification Standard (GICS).
Sectors make it easier for investors to have more accurate depictions of how different regions of the market are doing.
Sectors help investors organize and categorize their portfolio which helps with devitrification
Energy - companies involved in the production, exploration, refining, distribution, and sale of energy resources such as oil, natural gas, coal, and renewable energy sources like wind and solar power.
Largest stocks in this sector are Chevron and ExxonMobil.
Factors in performance include: Geo-political tensions (ex. Russia and Ukraine conflict affected gas prices), access to materials, and changes in technology.
Financial - institutions and businesses involved in managing and facilitating monetary transactions, including banking, investment services, insurance, and asset management.
JP Morgan Chase and Berkshire Hathaway are the biggest companies in this sector.
Factors in performance include: inflation (rising interest rates), investors, and consumer debt levels.
Best to invest in when there's a belief that the market has undervalued or overlooked their potential for future growth
Industrial - companies involved in the manufacturing of goods, construction, engineering, and the provision of industrial services.
does not rely on the general consumers in the population, but tends to produce equipment for other corporations that do provide products for general consumers in the market.
Specific industries in this sector include aerospace, transportation, construction, and engineering.
Boeing and Union Pacific are the biggest stocks in the industrial sector.
Factors in performance include: access to resources, government policy and regulations
Best performing in cyclical stages or phases of economic recovery or expansion
HealthCare- industries related to the provision of medical services, pharmaceuticals, biotechnology, medical equipment, and healthcare facilities.
Has two smaller sectors: one being the companies that develop medicines and treatments like biotechnology, and the other sector being the distribution of healthcare goods and services like health insurance and soap.
The two biggest stocks in the sector are Johnson and Johnson and UnitedHealth Group.
Factors in performance include: cybersecurity, technology improvements, and price transparency.
Best performing as a growth sector so during economic expansions and periods of innovation.
Technology- companies that are involved in the manufacturing and development of technology products.
This can be through software engineering, producing computer parts, or creating new equipment like phones.
The biggest companies in this sector are Apple and Microsoft.
Factors in performance include: Accessibility of resources, policy, and overall growth of the economy.
Best performing as a growth sector so during economic expansions and periods of innovation.
Utilities- companies involved in the generation, transmission, and distribution of essential services such as electricity, natural gas, and water to residential, commercial, and industrial customers
Electrical energy producers fall within this region, though it may be intuitive that they fall under the energy sector.
The largest companies in this sector are Duke Energy and American Electric Power.
Performance factors include demand for fuel, natural resource policy/conservation, and financials.
Consumer Discretionary- goods and services that are non-essential or optional for consumers, including items such as luxury goods, entertainment, travel, and dining out
These companies are dependent on consumer demand, so as the economy does well so will these companies.
The biggest companies in this sector are Amazon and McDonalds.
Factors in performance include: consumer spending, consumer confidence, and rates (wage, inflation, etc.).
Materials- companies involved in the extraction, processing, and production of raw materials such as metals, chemicals, paper, and forestry products.
Material companies include mining, chemicals, construction material, lumber, and etc..
The biggest companies in this sector are Sherwin-Williams and DuPont.
Factors in performance include: inflation, geo-political tensions, preservation of resources, and demand of certain resources.
Consumer Staples- companies that sell goods and services that consumers are likely to buy no matter what financial circumstance they are in.
These things include food, drink, personal care, etc..
Coca-Cola and Procter & Gamble are two dominant players in this sector.
Factors in performance include: the overall progression of the economy, government policy, product trends, inflation, and consumer spending.
Real Estate- the buying, selling, leasing, and development of properties, including residential, commercial, and industrial real estate assets.
Real estate development is the development of projects like buildings, and management is obtaining tenants for certain properties.
American Tower and Simon Property Group are of the top stocks in this sector.
Factors in performance include: inflation, demographics, and consumer spending.
Communication Services- telecommunications companies and social media service companies.
It is a relatively new sector, and these services used to be incorporated into other sectors.
Social media companies like Facebook(Meta) and the engine Alphabet dominate this sector.
Factors in performance include: technological innovations, consumer spending, and general progression of the economy
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