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The 11 Stock Market Sectors and Their Performance


Finding the right financial advisor who fits your needs doesn’t have to be hard.SmartAsset’s free toolmatches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors who will help you achieve your financial goals,get started now. A sector represents one part of the stock market and every sector has things that make it unique.

Similarly, a weak Financial Sector is an indicator of a weak economy. Many value investors shop for Energy Sector Stocks when oil prices are low or the economy is bad. Rising sales of automobiles and smartphones show consumers have more disposable income, which indicates a good economy. Falling sales of cruise ship tickets or video games can show consumers have less money indicating a bad economy. Disney owns streaming services, Disney+ and Hulu, Marvel Comics, Lucasfilm , theme parks, resorts, and movie studios. Comcast owns television networks, the Peacock streaming service, and cable television networks.

11 sectors of the stock market

The GCIS also lists companies that provide equipment and services for fossil fuel producers as energy stocks. The Energy Stock Sector includes any company that extracts or makes burnable fuels. Most Energy Sector Stocks are fossil fuel makers, including oil and gas companies and coal miners. Companies that own oil wells and oil refinery operators are energy sector stocks. A stock market sector is a group of stocks that have a lot in common with each other, usually because they are in similar industries.

There’s so much information out there, and it’s hard to know what’s true and what’s not. Healthcare is appealing because governments and insurance companies pay many of the bills. In the United States, almost everybody over 65 uses the Medicare single-payer health insurance program.

The stock market is often divided into 11 major sectors representing key areas of the economy. Within each sector, there are a number of different publicly traded companies that share the same broad focus. Here, revenue is usually generated swissquote forex broker review from mortgages and loans that increase in value as interest rates rise. When the economy climbs, there will be more demand for financial services. Even insurance companies and investment brokers aren’t safe from the effects.

Stock Sector 2, 5 & 10-Year Performance vs. S&P 500

So just because a market sector has done well up to now doesn’t necessarily guarantee that it will deliver the same or a higher level of returns in the future. The authors & contributors are not registered financial advisors 3 moving average crossover strategy and do not give any personalized portfolio or stock advice. Many Utility Companies operate infrastructure that delivers those services. Some electric companies own power lines but no generating plants, for example.

11 sectors of the stock market

The stock market can be an overwhelming place, especially if you’re new to the scene. With so many stocks to choose from, you might not know where to begin. 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. Investing in individual telecom stocks may present higher volatility, but the telecom sector overall has exhibited reasonable long-term growth. The utilities sector includes companies providing electricity, gas and water as well as energy traders and distributors of energy.

sectors of the stock market

The information technology sector is made up of companies that make our internet-driven world work. To learn more about these companies and the sector, check out our Tech Stocks research. These industries rely on a strong economy where people can spend on more luxurious items, such as buying a new car or traveling on vacation. That’s why this sector is sometimes referred to as “consumer cyclical.” It can be a great investment in a growing economy and a good investment in a stable one. Interestingly, the sector does not include most renewable energy companies, which are generally considered either utilities or industrials.

  • The consumer staples sector is filled with companies that manufacture and distribute essential goods and services like food, household goods and personal care products.
  • Thus you can classify Disney as an Information Technology company and a Consumer Discretionary business.
  • The largest banks today are much more gargantuan than they were in the financial crisis.
  • Large fund companies that managed index-based funds had to buy more of these real estate stocks in order to match the new weightings in the sector index.

As the economy continues to rebound, there would undoubtedly be opportunities in the real estate sector. Investors love the sector because of its ability to generate healthy dividends along with capital appreciation. There’s more than one way to add specific sector exposure to your portfolio. For example, you could pick a sector and buy individual stocks that represent one or all of the industries it covers. Or you could invest in a sector mutual fund or exchange-traded fund, such as a utility fund or a tech fund. Understanding where a company fits into the sector classification can be helpful as you diversify your portfolio and include companies from a broad range of sectors.

Consumer Discretionary: 11 industries

Standard & Poor's 500 (S&P 500) Index is an unmanaged market-weighted index of 500 of the nation's largest stocks from a broad variety of industries. The S&P 500 represents about 80% of the total market value of all stocks on the New York Stock Exchange. Market-weighted means that component stocks are weighted according to the total value of their outstanding shares.

11 sectors of the stock market

This sector is generally a slow and steady performer, rather than a growth sector. But “green” energy offers the promise of higher returns, although with higher risk. Large fund companies that managed index-based funds had to buy more of these real estate stocks in order to match the new weightings in the sector index. We believe this research report will provide you with the most in-depth overview and understanding of the 11 stock market sectors and every top-performing Stock and ETF in each sector.

In this article, we’ll take a look at the 11 sectors of the stock market and various ETFs that can be used to gain exposure to them. “Diversified sector exposure ensures that directly correlated events like the technology stock crash or the real estate bubble don’t derail a portfolio,” Hart says. Consumer discretionary companies are in businesses that depend primarily on consumer demand.

Also, you can compare how consumer discretionary ETFs as a subgroup compare with other subgroups of sector ETFs – for example, financials. Utility companies are usually well-established, keeping stable revenue even in recession. However, years of changes, such as mergers and new market demand, led to the decision to redefine the sector.

The following industries make up the information technology sector: is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which receives compensation. We may receive compensation from our partners for placement of their products or services.

Don’t Ignore MUSI, a Current Income ETF

A company is assigned to a single GICS industry according to the definition of its principal business activity as determined by Standard & Poor's and MSCI. Revenues are a significant factor in defining principal business activity; however, earnings analysis and market perception are also important criteria for classification. Several of the 69 industries do not have companies represented in the S&P 500 Index; therefore, performance is not available for those industries.

We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Consumer discretionary is a term to describe goods and services that are deemed non-essential by consumers. To list, this sector consists of retailers, apparel companies, media companies, consumer durables, and consumer service providers.

Some energy sector investors monitor events in the Middle East and other oil-producing regions. War and unrest in the Middle East have historically disrupted oil production, driving prices. Oil and gas industry suppliers often make more money when oil prices are high.

Many people buy the so-called FANG and FAANG stocks because those shares offer high growth rates. Over the last ten years, the top 3 performing companies in the technology sector are Broadcom +1799%, Adobe +1477%, and Cadence Design Systems +1123%. With a market capitalization of $2.9 trillion, it comes in 4th place with a market-beating 980%. Plus, Disney operates video-streaming services, resorts, theme parks, a consumer products business, and movie studios. Thus you can classify Disney as an Information Technology company and a Consumer Discretionary business. The Healthcare Sector includes all businesses that manufacture and market medical goods and services.

Some of the largest companies in the technology sector are Apple and Microsoft. Some of the largest companies in the materials sector are Sherwin-Williams and DuPont. Some of the largest companies in the energy sector are ExxonMobil and Chevron. “For practically any investor, I would advise the total US stock market fund as the only U.S. stock investment you need,” Campos said. The materials sector consists of mining, refining, chemical, forestry and related companies that are focused on discovering and developing raw materials. Since these companies are at the beginning of the supply chain, they are vulnerable to changes in the business cycle.

Many investors have moral objections to Energy Sector Stocks because of Global Warming. In recent years, the Energy Sector has become unstable and made less money because of falling prices and the growing popularity of electric vehicles and solar energy. Warren Buffett buys Consumer Staples because people have to buy those products in any economy.

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