Many love investing in stocks and those that want to create a more diversified portfolio will want to know what sectors they are missing out on. Whether you are in growth stocks or value stocks, knowing all the sectors can help take advantage of some sectors being beaten down. For example, oil took a huge hit when the pandemic hit in 2020. However, towards the tail end of 2020 and the beginning of 2021, oil stocks have done amazingly.
There are a total of 11 stock sectors that are used to categorize all the stocks in the market.
- REITs(Real Estate Investment Trust)
- Information Technology
- Consumer Discretionary
- Consumer Staples
Knowing these different sectors allow you to make educated decisions during different markets. For example, currently, Information Technology is being hampered by fear of inflation and higher interest rates. However, Financials are actually doing well in this environment. There are different “stereotypes” with different sectors that people generally attribute each one. For example, Technology tends to be known as “high-flying” because they perform really well when they do move up; Utilities tend to be known as “boring” because there is nothing “hot” about this sector, and it tends to be very defensive.
Hopefully this simplifies and easily lays the stock sectors out. We appreciate y’all for letting us be a part of your Break Time!