Stock Market Sectors: How to Access All the Different Markets

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  • Read on for insight into how to get exposure to particular sectors and the factors that move them.
  • The energy sector consists of all companies that play a part in the oil, gas, and consumable fuels business.
  • With the inclusion of biotech, there’s always room for growth.
  • Sectors are typically considered to be a broad classification.
  • He oversees editorial coverage of banking, investing, the economy and all things money.

In other words, these 9 sectors react to market conditions. Hence, the majority of the stock sectors list is found in the cyclical category. These groupings help investors clearly track a given industry’s market performance through time. On complete turtle trader any trading day, or over the course of a year, some sectors may climb while others sink. Seasoned investors typically have at least some idea what drives those different moves, even if they don’t necessarily become experts on every sector.

They are also companies that provide us content, such as information, advertising, entertainment, news and social media. Examples of the communication services sector stocks include Alphabet , AT&T , Comcast , Facebook , Twitter and Verizon . The financials sector includes companies in areas of finance.

What are stock market sectors?

While we adhere to stricteditorial integrity, this post may contain references to products from our partners. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial berkshire hathaway letters to shareholders book coverage of banking, investing, the economy and all things money. We are an independent, advertising-supported comparison service. I wrote this article myself, and it expresses my own opinions.

11 sectors of the stock market

“You’re going to get all the sectors in proportion to what they represent in the market. You’re not making a judgment call as to whether a sector is over- or undervalued,” Mr. McIntyre said. Stock sectors that were big losers in 2020 soared in 2021 to become the year’s biggest winners, while the highfliers of the previous year posted returns that ranged from mediocre to awful. We teach you these skills in our trading community and on our live daily streams. Our courses will give you the foundation and then you will be able to put the skills to use live each day in our trade rooms.

Knowing when to buy low and sell high is very important because that’s how profits are made. There are 11 major market sectors, as defined by the Global Industry Classification Standard , that most investment managers and investors will monitor and use for investment purposes. A sector is further broken business secrets from the bible summary down into sub-categories or specific industries, which allows for a more defined and closer grouping of similar businesses. The Telecommunication Services industry includes wireless and diversified telecommunication services companies — essentially, telephone and internet network providers.

Energy Sector

Because they are considered essential goods, consumer staples experience fairly consistent demand year-round and are relatively unaffected by market-moving factors. As such, the Consumer Staples sector is often a popular choice during recessions and among investors seeking safe returns and dividends with minimal volatility. Outbreaks of infectious diseases, such as the coronavirus pandemic, can positively impact the health care sector by increasing investment for research and development and demand for treatments. MRNA vaccine names such as Moderna ​, BioNTech ​ and Pfizer ​ are companies that benefited throughout the pandemic. A diversified fund is a fund that is broadly diversified across multiple market sectors or geographic regions. A well-diversified portfolio should have access to as many sectors as possible, and not concentrate too many funds into any single sector or related sectors.

11 sectors of the stock market

There are 11 stock market sectors, as classified by GICS, which stands for Global Industry Classification Standard. These sectors include healthcare, materials, real estate, consumer staples, consumer discretionary, utilities, energy, industrials, consumer services, financials, and technology. By contrast, the consumer discretionary sector includes businesses that produce and distribute goods for which demand generally depends on a consumer’s financial status. These are products consumers might consider purchasing with excess funds , including automobiles and related components, consumer durables , textiles, apparel, and other luxury goods. The consumer discretionary sector also includes leisure products and services, such as restaurant stocks, hotels, casinos, and other businesses in the leisure industry. The consumer discretionary sector covers goods and services for which consumer demand depends upon consumer financial status.

VanEck Semiconductor ETF

This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Each firm is grouped into a sector, which is then further broken down by industry group, industry, and sub-industry.

StocksToTrade’s powerful stock screener will turn up some of the same stocks in volume scans. And you might start to see the same names in the percent gainers scan. Electric, gas, and water utility stocks are the old, dependable stocks. They only operate regionally, so they can’t grow too much. Wireless, internet, and cable providers are the backbone of this sector. Telecom is the sector that all of our technology runs on.

11 sectors of the stock market

You’re not going to go out shopping when you have to save your money. Hence why these companies need a booming economy to perform. As a result, that allows all traders or investors to classify stocks by regulated definitions. We have over $3,000 worth of free trading courses to help you get started trading. Even the best traders in the world fail 30-40% of the time, but they manage their risk for when patterns fail.

Real Estate

The health care sector also covers companies in the pharmaceuticals, biotechnology, and life sciences spaces. The energy sector covers companies that do business in the oil and natural gas industry. It includes oil and gas exploration and production companies, as well as producers of other consumable fuels like coal and ethanol. The energy sector also includes the related businesses that provide equipment, materials, and services to oil and gas producers.

There are two primary ways to invest in stock market sectors. Given the vast array of other sectors and niches served and improved by information technology companies, inclusion in this sector can be somewhat subjective. But broadly speaking, regardless of the target sector niches of their products and services, information technology stocks either provide or enable technological solutions. A diversified stock portfolio will holdstocksacross most, if not all, GICS sectors. Diversification across stock sectors helps to mitigate idiosyncratic or unsystematic risks caused by factors affecting specific industries or companies within an industry. Therefore fund analysis is used by fund managers to exclude specific investments.

The telecommunication services sector features cable companies, internet service providers, wireless providers, satellite companies, and many more. Consumers are generally providing recurring revenue for these companies, but some subsets of the industry face rapid change. The financial sector consists of banks, insurance companies, real estate firms, and investment funds, among others.

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