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Answer:
Dear
BuyandHolder,
The
terms are very similar and in fact, are often used
interchangeably. But if you wish to be seriously specific,
sectors is a broader term, with many industries
making up a sector.
Analyst
vary somewhat when called upon to draw up a precise
list of sectors. The following, however, is fairly
universal:
Basic
materials
Consumer goods
Consumer services
Energy
Financials
Health care
Industrials
Technology
Telecommunications
Transportation
Utilities
Within
these eleven sectors, there are various industries.
For example, the financial sector is made up of banking,
brokerage firms, insurance companies. Transportation
would include the automotive & trucks industry, airlines,
railroads and shipping.
Some
of the other popular industries are: aerospace & defense,
apparel stores, auto parts & stores, automobile manufacturers,
computer hardware, computer software, entertainment,
food & beverage, furniture manufacturers, long-term
care, oil & gas drilling/exploration, minerals (gold,
silver, mining), real estate, resorts & casinos, restaurants,
steel & iron, and tobacco.
Two
sources that will help you track the performance of
various industries (as a grouping) as well as individual
stocks within an industry are Morningstar (www.morningstar.com/)
and Value Line (www.valueline.com).
Big
Charts also presents continually updated, interesting
tracking information (www.bigcharts.com).
The
definitive book on the subject was written by a Harvard
B-School professor, Michael Porter; it's entitled
Competitive Strategy.
Although
it's quite technical, one of the easy-to-understand
chapters that you as an individual investor will find
useful is on the role competition and new entrants
into an industry group. Think in terms of the airline
industry - the startups, such as jetBlue, give the
older carriers a run for their money, often forcing
them to lower prices, create new routes, lay off employees,
turn to part-time workers and the like -- at least
initially.
As
you adjust your stock portfolio, sectors and/or industries
should very much be part of your consideration. At
times, certain sectors or industries perform better
than others and that's where you want to be. And at
no time should you have all your eggs in one industry's
basket.
Good
luck!
BUYandHOLD
does not recommend any securities. The securities
mentioned above are being used for informational and
illustrative purposes only and should not be regarded
as an offer to sell or as a solicitation of an offer
to buy.
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