Stock Market Sectors: A List of The 11 GISC Sectors

stocks in different sectors

In an uptrend, each correction low should touch the upward sloping trendline. If the trend is continuing, there should be a bounce off the trendline and in the direction of the trend. By analyzing several time frames, we can pick the hottest sectors that are not just performing well right now but have been showing strength over a longer period. The time frames that investors choose will depend on their investment time horizon. Next, we choose the sector that is one of the top-performing sectors.

Firms engaged in oil and gas drilling, refining, and exploration and development of oil and gas reserves are included in the energy sector. This sector also includes firms that generate non-renewable and renewable energy and firms that provide oil and gas equipment services. 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.

stocks in different sectors

This sector also includes real estate investment trusts (REITS), which are companies that purchase multiple income-producing assets, such as office buildings and hotels. For example, a stock in the energy sector is typically not going to be affected by the same market pressures as a stock in the health care or real estate sector. As a result, investors will want to prioritize investing in different sectors during different stages of a business cycle. In other words, some sectors or industries do better during economic recessions, and others do better during economic expansions.

Trading Challenge

The GICS is updated periodically to reflect changes in the market. It’s possible that fuel prices could come down somewhat over the near term. However, the European Union plans to ban most Russian oil imports by the end of this year. That could keep prices at high levels for a while — and keep the energy sector as one of the best places for investors to park their money. We’re in a largely barren season right now, with the major market indexes in bear markets. Buying and selling stocks is primarily done through brokers or via online trading platforms.

The consumer discretionary sector covers goods and services for which consumer demand depends upon consumer financial status. For example, if you make $25,000 per year, you probably buy a different car than someone who makes $25 million per year. The sector includes companies that sell higher-priced items like automobiles and luxury goods, as well as leisure products. You’ll find both brick-and-mortar and e-commerce-based retail companies in this category, along with hotel and restaurant stocks. This sector includes companies that provide basic amenities and essential services like electricity, natural gas, water, sewage and waste disposal.

What Is the Stock Market? A Definitive Guide for Newbies and Veterans

Let’s take a look at the different stock market sectors and what you need to know as you manage your brokerage account. Unlike consumer discretionary companies, consumer staples companies make products that people buy on a regular basis. Discretionary products are products that people don’t need to purchase. The utilities sector comprises companies that provide basic amenities to consumers. Companies that provide services related to water, electricity, sewage, natural gas, and dams are all part of this sector.

Once you enter a symbol, a summary displays showing all sectors and the SIC Code in which the symbol is found. A snapshot quote and chart for the symbol are also displayed on the page. Some of the largest materials companies in the world include DuPont (DD) and The Sherwin-Williams Company (SHW). UPS (UPS -2.69%) and Raytheon (RTX -1.74%) are the largest U.S. industrials stocks. The financials sector tends to start picking up toward the end of a down cycle as things start looking a little better.

  • Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens.
  • The stock market’s significance goes beyond providing investment opportunities for individuals.
  • Discretionary products are products that people don’t need to purchase.
  • Our team of professionals can integrate innovative, evidence-based approaches with sector expertise across the aged care operating and regulatory environment.

The utilities sector includes companies that provide customers with utility services, such as water, electric, and gas. Since utilities are considered to be essentials for daily living, the utilities sector is also generally seen as a defensive sector. True diversification would entail buying ETFs in different sectors.

When we’re talking about energy, we’re not talking about things like EV stocks. We’re not even talking about energy producers and traders — they’re in utilities. Investors would be best served to be selective within the industrials sector, strategists from Wells Fargo and Bank of Montreal advised. The former recommended that stock pickers target names in the air freight, logistics, building products, and railroads industries over their peers in airlines and commercial aerospace.

Our latest report provides an in-depth analysis of the Australian aged care market, including the top 25 home care and residential care providers. In terms of the overall number of operational places and residences per provider, the Australian residential aged care market is continuing to grow. This comes despite the drop in occupancy levels and lower demand for residential aged care.

A diversified stock portfolio will hold stocks across most, if not all, GICS sectors. Diversification across stock sectors helps to mitigate idiosyncratic or unsystematic risks caused by factors affecting specific industries or companies within an industry. Of course, there’s no guarantee you’ll make extraordinary returns, but this strategy does offer the chance to earn better-than-market returns. Some monitoring of positions is required to make sure the sectors and stocks are still in favor with the market. Also, be aware of overtrading, which can result in excessive commissions; this why we use multiple timeframes. The industrials sector encompasses a wide range of different businesses that generally involve the use of heavy equipment.

Wall Street’s biggest banks share why they’re most bullish on stocks in these 6 sectors in 2022

GICS was developed by index providers MSCI and Standard & Poor’s. But Bank of Montreal strategists believe there’s more room for industrials to run in 2022. The group should be “a primary beneficiary of infrastructure spending,” a team of the firm’s top minds wrote, and the outlay will keep the economic recovery strong and cyclical stocks in the limelight. The lack of love comes from concerns that a world pivoting away from fossil fuels and toward companies with more of an environmental, social, and governance, or ESG, focus will hold energy stocks back. But BlackRock strategists have shrugged off these concerns, citing opportunities ahead. This chart compares the performance of the overall S&P 500 Index to the performance of the 11 sectors over one-, five-, and 10-year time frames.

stocks in different sectors

The energy sector includes companies that explore for, produce, generate, refine or transport consumable fuels. We will list the sectors by weighting in the S&P 500 Index, or the percentage that the sector “takes up” on the S&P 500 based on market capitalization. It’s worth taking an in-depth look at stock market sectors to help guide your investment strategy. We’ll explore each stock market sector, walk through a few of the largest and well-known companies within each sector as well as various industry groups. You’ll likely recognize many of the names — the most well-known brands in the world tend to lead their respective stock sectors. GICS divides the stock market into 11 sectors, and further subdivides the market into 24 industry groups, 69 industries and 158 sub-industries.

It can, however, show you how past trends and economic cycles have affected each sector, which can help you decide how to tailor your investments. If the stock market were a house, sectors would be the rooms. Just as each room has specific types of furniture, each sector has certain types of stocks. You wouldn’t put a dining room table in the bathroom, and you wouldn’t green hydrogen stocks lump energy giant ExxonMobil (XOM) in with a bunch of consumer electronic stocks like Apple (AAPL). 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.

Consumer discretionary

This sector includes telecommunication services and media and entertainment. 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. Despite dips in the stock market over the past three years, health care sector gains outpaced those of the S&P 500.

The other encompasses healthcare equipment and services, including surgical supplies, medical diagnostic tools, and health insurance. Telemedicine is a particularly interesting part of the healthcare sector that falls into the latter category. The consumer staples sector comprises companies that provide essential products and services that people need in their daily lives. Tough economic climates are ideal times to learn more about consumer staples.

When investing, it’s always good to get professional advice from a registered investment advisor. WiserAdvisor provides an online database of financial advisors from both Fortune 500 companies and small independent firms. All advisors are subject to a qualification process to be eligible for inclusion in the network. The financials sector includes businesses that are primarily related to handling money.

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The company concentrates on the global treatment of serious and rare diseases. No, we’re not talking about the house you live in — unless it’s a company-operated rental. This sector’s products go in a million different directions. Knowing these broad categories helps us to understand what affects a stock’s movement.

The Global Industry Classification Standard (GICS) divides the market into 11 sectors, composed of 25 industry groups and 74 industries, as of March 2023. The commonly-used system helps shape how ETFs and mutual funds are constructed. The Global Industry Classification Standard was developed by index providers MSCI and the S&P Dow Jones. Its hierarchy begins with 11 sectors which can be further delineated to 24 industry groups, 69 industries, and 158 sub-industries.

What Is a Good Sector Breakdown for a Portfolio?

While how these companies make their money may seem straightforward, there’s more to it. If you want to learn more, a financial advisor can help you understand this process.