1 Answers: What are the Major industry sectors? Investing in Stock Market

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Looking for more details on Sectors and Industries.

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Isaac Mathis 8 months 1 Answer 80 views 0

Answer ( 1 )

  1. Companies are always divided into Sectors and Industries. A Sector represents a large part of the economy. This can be a Sector from a financial to technology companies.

    Industries, on the other hand, are much more specific and are part of a Sector. For example, banks are in the Industry within the financial Sector.

    The existence of Sectors and Industries are important to note as they frequently all move together in terms of stock price. And the events in the economy can affect an entire Industry.

    For example, if there are higher gas prices, the profits of transportation companies would fall, thus causing the company stock price to plummet.

    Or if an Industry was in the midst of an innovation and was the center of attention, much like during the “dot com” bubble, which was a time when investors bought up any tech companies they could finds even though their stock price was worthless.

    This resulted in the crash of 2000. An important part of maintaining a healthy portfolio, which means a collection of stocks, is by having stocks that belong to different Sectors and Industries.

    It is important as if say a stock of one industry were to fall, you would have the downside protection of the other stocks which would belong to different Industries and Sectors.

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