Sector Information Dashboard
A stock market sector is a group of stocks that have common characteristics, usually because they are in similar industries. There are 11 different stock market sectors, according to Global Industry Classification Standard (GICS).
Stocks are categorised into sectors to make it easy to compare companies that have similar business models. Sectors also make it easier to compare a stock’s performance relative to the sector’s performance.
Key Takeaways
Knowledge of which sectors to invest in during different phases of the business cycle is crucial to building a robust investing methodology. Every investor experiences a scenario wherein they may have invested in a great company. Still, due to a lack of favourable sector performance, as a result of the current position in the business cycle, the stock doesn’t move at all. As soon as the macroeconomic conditions become favourable for the sector, the stock shoots up. For example, Information Technology stocks do well in a low interest-rate environment.
It is recommended for any investor to have a good understanding of the sector a stock belongs to and the position in the business cycle that is favourable for that sector and stock’s performance.
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