The energy sector also includes the related businesses that provide equipment, materials, and services to oil and gas producers. Oddly enough, though, it doesn’t include many renewable energy companies, which instead are considered utilities. The consumer staples sector includes companies involved in food, beverage, and tobacco, as well as producers of household goods and personal products. Since these are goods and services that consumers need, regardless of their current financial condition, consumer staples is considered to be a defensive sector (i.e. recession-proof industries). The utilities sector includes businesses that deliver electricity, gas, and water to consumers. This sector has provided steady returns since 2017—and while it only showed modest growth in the first half of 2022, it was only one of four sectors to show growth at all.

MarketBeat contributors discuss how Nike refocusing on direct-to-consumer has the stock moving in the right direction and getting the attention of analysts. She developed her website, College Money Tips, to help families navigate the college journey. She connects with a wide-reaching audience through her site, through an upcoming digital course, and the myriad of publications for which she writes. Melissa graduated summa cum laude with a bachelor of arts in communication studies with minors in psychology and Spanish from Central College.

Editorial content from NextAdvisor is separate from TIME editorial content and is created by a different team of writers and editors. Get all of our latest home-related stories—from mortgage rates to refinance tips—directly to your inbox once a week. Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more. Doing this can get you off to a better start as a trader because you’ll know which stocks have momentum behind them and which have some headwinds.

In addition, most real estate investment trusts, which are special tax-favored business entities that operate in various areas of the real estate industry, get counted as within the real estate sector. The technology sector includes multiple sub-sectors and industries, from semi-conductor producers to software and hardware providers, as well as internet stocks and cloud computing. Here are the 11 stock market sectors, starting with the highest-growth stock sector from 2017 to 2022 and descending in order. If you’re trying to decide which sectors to invest in based on returns, then you might use sectors that outperformed the S&P as a baseline.

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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. The number of industries that do not have representative stocks may vary over time. You can also buy an exchange-traded-fund , which trades like a stock but which offers full transparency. You know what it’s trading at, the spreads and the price at which your position was bought or sold instantly.

Boeing, 3M, Honeywell, UPS, Delta, Lockheed Martin, Deere, and Caterpillar — they’re all industrials. The defense, machinery, aerospace, airlines, construction, and manufacturing companies are in here. The gold mining industry can be accessed through our US Gold share basket, while the iShares Global Materials ETF offers sector-wide exposure.

Investing in Industrial Stocks Industrial companies span several subsectors of the economy they support. I have no business relationship with any company whose stock is mentioned in this article. Some of the largest materials companies in the world include DuPont and The Sherwin-Williams Company .

Stock Market & Sector Performance

This sector can offer significant growth opportunities as the world moves more online, but older companies face significant challenges from more dynamic entrants. There are 11 stock market sectors, according to the Global Industry Classification Standard, or GICS, which is an industry taxonomy developed in 1999 by MSCI and Standard & Poor’s. Within the entire GICS structure, there are 11 sectors, 24 industry groups, 69 industries and 158 sub-industries into which all major public companies are categorized. The stock market may seem overwhelming, but the classification system that separates the stock market into 11 sectors can help investors understand the different sectors of the economy. An individual can choose to invest in a single company, within an industry, or across multiple sectors to increase exposure and reduce risk. Or, they may choose to invest in a fund that offers exposure to multiple sectors.

The industrials sector encompasses a wide range of different businesses that generally involve the use of heavy equipment. Transportation stocks such as airlines, railroads, and logistics companies are found within the industrials sector, as are companies in the aerospace, defense, construction, and engineering industries. Companies making building products, electrical equipment, and machinery also fall into this sector, as do many conglomerates. The energy sector comprises businesses involved in the exploration, production, refining, and sale of energy resources, including oil and natural gas, as well as companies that service these industries. By dividing your investments into sectors, you can see where you might be overexposed or underexposed.

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As mentioned, some sectors may be more in favor during certain periods of the business cycle than others. U.S. Sectors & Industries Performance is represented by the S&P 500 GICS® indices. Last % change is the nominal change in the price of the index from the previous trading day’s close expressed as a percentage as of the index value at the time noted in the Date & Time field. 1 Year % Change is the nominal change in the price of the index from previous trading day’s close and trading day close 1 year ago. Chart Performance enables you to chart and change performance timeframe of the percent change for the indices as well as the ability to add a user-entered symbol.

• Higher-quality stocks often have the largest market capitalizations and are the most widely owned.
• While working in college admission, Melissa Brock pursued a freelance writing and editing career.
• You wouldn’t put a dining room table in the bathroom, and you wouldn’t lump energy giant ExxonMobil in with a bunch of consumer electronic stocks like Apple .
• Trading on stock market sectors rather than individual companies can reduce the risk of investments completely failing as your risk is spread out across many companies.
• Knowing how these sectors work can guide the selection ofstocks, mutual funds, exchange-traded funds and other investments.

Investing in Top Utility Stocks Carrying everything from water to natural gas, companies here can be a low-risk investment. Investors interested in exposure to all sectors can consider a broad-based mutual fund or ETF like the SPDR S&P 500 Trust ETF . Investors can use the sectors to isolate stocks of specific interest or to build a diversified portfolio.

Sector mutual funds and ETFs allow investors to buy stock in hundreds of companies in a sector with a single investment. For example, if you wanted to get into the materials sector, a popular ETF is iShares Global Materials ETF . And a popular ETF sector for financials would be Financial Select Sector SPDR Fund .

Sectors also make it easier to compare which stocks are making the most money. This helps you make decisions about what your next investments will be. The other encompasses healthcare equipment and services, including surgical supplies, medical diagnostic tools, and health insurance. By learning about the various stock market sectors, investors can gain a greater understanding about diversification options and how the market is categorized. Find out how many sectors classifications there are in U.S. markets and what’s important for investors to know about each of them.

Like an individual stock, you can buy ETFs and sell them multiple times in a day. Like a mutual fund, they own or track multiple names within a sector to spread out risk through diversification. Stock market sectors represent a general field of business and companies. The saxo bank: an overview of the firm sectors are further filtered based on principal businesses, common products, services, practices and themes. A total market index fund is a great way to keep your portfolio diversified, while also getting a piece of the 500 largest companies of the U.S. stock market.

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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.

Consumer Staples Sector

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. Also, it’s important to remember that larger companies often may span multiple sectors or industries. While a firm may be classified in one area, it often has significant operations in others. So it can be important to see the big picture of what a company does and not get too tied down to the classification.

If you plan to put your hard-earned money into a stock, you’d better know how its sector has performed. Coming in blind without any knowledge of the way it operates in can be a recipe for disaster. A sector breakdown dowmarkets broker: is this a scam or not? is a term used to explain how a portfolio or fund is diversified into different sectors. It can give investors an idea of what percentage of the fund is allocated to each sector to help them decide where to invest.

Netflix Inc. and Walt Disney Co. are considered part of the communication services sector. Other companies within this sector include AT&T, CBS Corp., and Facebook. Companies in the health care sector provide medical services, make medical equipment, research and produce pharmaceuticals, sell health insurance, and otherwise facilitate health care for individuals.

Not all stocks fit perfectly like jigsaw pieces into a specific sector, which can be confusing. Doug is a Chartered Alternative Investment Analyst who spent more than 20 years as a derivatives market maker and asset manager before “reincarnating” key to markets forex broker introduction as a financial media professional a decade ago. Indexes are unmanaged, statistical composites and their returns do not include payment of any sales charges or fees an investor would pay to purchase the securities they represent.

These stocks are often components in the benchmark S&P 500 index and have the advantage of heavy liquidity, which results in less slippage when purchasing. The only real way to hedge involves diversifying into multiple stocks within the sector but across different industry groups to spread the risk. Some of the largest companies in the real estate sector are American Tower Corp. and Simon Property Group. Some of the largest companies in the consumer services sector are Facebook and Alphabet .