Stock sectors group all the stocks in the stock market
according to their line of business into generally accepted
names. The underlying purpose of putting stocks into sectors is
to make diversification of investments easy. Structural
classification of an economy into different categories makes an
in-depth analysis more efficient. Benchmarks are created, using
various sectors. Comparison and analysis can then be done,
between sectors and different funds, ETFs and money managers of
There are three major organizations that maintain sector
classifications. In many ways they are very similar. Each one
has a unique method to break down companies and their lines of
The Global Industry Classification Standard (GICS) , is maintained by MSCI and Standard and Poors (S&P). There are 11 stock sector classifications, 24 industry groups, 69 industries and 158 sub-industries, in their schematic. Four of the sectors can be considered “defensive” and seven can be considered “cyclical”. The Global Industry classification is used by many stock tracking companies, funds and ETFs, to benchmark performance. It is a very widely used and accepted grouping. For that reason, StockMarketStrategies.net uses this classification to help users understand companies stock.
The Industrial Classification Benchmark (ICB), is maintained by the FTSE group and Dow Jones. It is similar to the GICs classification. However, instead of 11 sectors, it has 10 industries, as the most general classification. From there, it divides the industries into 19 super-sectors and then divides those into 41 sectors. Lastly it divides the 41 sectors into 114 sub-sectors
Understanding stock sectors is one of the stock basics that
help in the formulation of effective investment strategies. It
is crucial to know the differences between each stock sector.
Defensive stocks tend not to go down in price as much as the rest of the stock market in a bad economy, since people are always in need of the services and goods they offer. However, stocks in this sector do not necessarily rise with a rising market.
Comprises companies that specialize in the production of consumer products designed to be used Immediately, food products, beverages, drug retailing, tobacco, and personal products. Learn more about consumer staples sector stocks.
Consists of companies such as gas utilities, electric utilities, independent power producers, multi-utilities, and energy traders. Learn more about utilities sector stocks.
Belonging to this sector are companies such as pharmaceuticals and biotechnology, healthcare equipment and services. Learn more about health care sector stocks.
This sector includes companies that provide fixed and wirless modes of communciation. As well as internet services. Learn more about telecommunication services sector stocks.
There are a total of seven stock sector in this category. They are characterized by how they move in accordance with the stock market and economy.
Companies belonging to this sector include office electronics, wireless telecommunication services, information technology services, computers and peripherals, internet software and services, communications equipment, etc. Learn more about information technology sector stocks.
Companies belonging to this sector are metals and mining, containers and packaging, construction materials, chemicals, paper and forest products. Learn more about materials sector stocks.
Companies in this group include construction and engineering, autos, auto components, aerospace, and defense, electrical equipment, conglomerates, marine, airlines and building products. Learn More about industrails sector stocks.
Companies in this group include that develop and produce drilling and energy-related services, crude oil and natural gas. Learn more about the energy sector
Companies in this category include thrifts and mortgage finance, consumer finance, capital markets, commercial banks, insurance, and diversified financial services. Learn more about financials sector stocks.
This sector is comprised of companies that produce consumer products that are purchased with income left over after essential items are purchased. Learn more about consumer discretionary sector stocks.
The real estate sector is primarily involved in housing and retail property construction and management. Learn more about real estate sector stocks.
These are sectors not included in the NASDAQ or GIC classification
These are investment products that hold assets. Usually, they attempt to mimic an index or a certain sector or industry. Learn more about ETF's, ETNs and Funds