Stock Market Sectors Explained

list of stock market sectors

What precisely are stock market sectors. An easy guide to explaining market sectors, and ways to use them to earn income thru investing.

The overall market is broken up into groups of stocks. Any group of stocks that does roughly the same thing is known as a sector. A sector is composed of a grouping of stocks that are in the same industry, or have approximately the same function.

For example if there is the metals world of the stock market. The metals sector is composed of any company that has to do with buying or selling metals, mining metallic , or processing and refining metals.

So the metals world of the stock market would be consisting of steel producers, steel mills, gold Miners, platinum , copper and so on.

Sectors inside can be further broken down into smaller more specialized groups, for example in the metals sector, there are business metals and valuable metals. Valuable metals would be stocks that have anything to do with gold, silver and platinum. Commercial metals are stocks that have to do with copper, steel, iron, aluminum and so forth.

The same thing is true of all stock market sectors. Let us use another example that everyone can understand. The original sector is a particularly enormous group of stocks possessing a bit similar functions. Like the transportation sector or the health care,or energy, or drilling or maybe pharmaceuticals. Then that large sector can be broken down into the smaller more specialized sectors. The transportation stock sector can be broken down into airlines, railroads, trucking stocks and even shipping .

These smaller stocks can then be further broken down into some highly specialized stock market sectors, such as domestic or overseas, or by seasonality aspects however most people generally focus on the the massive sectors of the market, and then their individual niches. Beginners often use sectors to earn money in the stock market; we are going to discuss this in another article.