Scroll down to see a list of Internet sites that will provide an education about market sectors. The sites are listed under topics:
1. Sector and industry breakdowns
2. Sector rotation
3. Sector Specific Sites
4. Small Caps.
We need to know about market sectors for two main reasons. It improves our selection of individual stocks. It is usually better to buy stocks in the strongest sectors and sell stocks in the weakest sectors, whatever our timeframe. Secondly, it is now possible to invest directly in many sectors.
Investing in sectors is generally safer than investing in individual stocks. Sectors are less vulnerable to news, earnings warnings and external events that can cause sudden changes in the price of a single stock. For most situations the best way to invest in sectors is to buy ETF’s, which trade like stocks. See the sites under the search phrase ETF's for an education in Exchange Traded Funds.
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Sector Breakdowns
http://www2.barchart.com has a breakdown of stocks into more than 200 industry groups.
http://www.investertech.com/ lists 12 sectors.
http://www.prophet.net/ has a breakdown into more than 200 industry groups.
http://www.standardandpoors.com/ has the most recognized breakdown of stocks into sectors with its breakdown of the S&P 500 stocks into sectors:
1. Energy
2. Materials
3. Industrials
4. Consumer Discretionary
5. Consumer Staples
6. Health Care
7. Financials
8. Information Technology
9. Utilities.
It also has a further breakdown into 24 industry groups by Global Industry Classification Standard.
http://www.toniturner.com/ lists about 25 sectors.
http://www.tradingscans.com/ lists about 30 sectors.
Sector Rotation
http://www.cornerstoneri.com/ has an article on Long Term Cycles / Asset Allocation which shows charts of P/E Multiples over the years and the ideal asset allocation for periods of growth, inflation, disinflation and deflation.
http://www.peterdag.com/ provides an explanation of the economy and stock market cycles in five phases.
http://www.pring.com/ has a diagram of the six stages of the business cycle and whether stocks, bonds or commodities are the most appropriate investment class for each part of the cycle in its Money Management section.
http://www.stockcharts.com/ shows how this translates into the ups and downs of the various sectors of the stock market with a neat diagram. It shows that the market predicts the economy. It also shows the sequence in which the sectors do well, with Technology leading the way out of a recession and Finance doing well as the market and the economy fade.
Sector Specific Internet Sites
Banking
http://www.bankstocks.com/ is not really an educational site but it does provide, as it says at the site, “independent insights on the financial services industry”. Tom Brown’s site is one that does not pull punches.
Homebuilders
http://dataplace.knowledgeplex.org/cds has information about housing. http://www.ofheo.gov The Office of Federal Housing Enterprise Oversight tracks average single-family house price changes by metropolitan area and publishes its house price index quarterly. http://www.mbaa.org the Mortgage Bankers Association site has the latest national and local housing news and economic commentary. http://www.realtor.org, the National Association of realtors site also has information such as house sales, the monthly consumer confidence figures from The Conference Board, and other housing related economic indicators. http://www.reitnet.com has basic education about REIT’s, Real Estate Investment Trusts. Metals
http://www.kitco.com is one of the best of hundreds of sites for education, articles and news for precious metals. http://www.kitcometals.com is for base metals. http://www.howestreet.com has a number of subsidiary sites such as http://www.nickelstocks.com, http://www.coalstocks.com, http://www.diamondstocks.net and http://www.scienceandtechnologystocks.com which allow us to receive an investors package from public companies whose logos appear on the web sites. Miscellaneous
http://www.durig.com is expert in monopolies. http://www.indexfunds.com has hundreds of articles dating back to 1997 on index investing.
Oil
The American Petroleum Institute’s site at http://api-ec.api.org is the site to visit to keep a watch on oil and gasoline statistics, policies, and a great deal of other information. The site has links to other petroleum related sites for more extensive information.
Tech
http://www.beatingwallstreet.com focuses on Biotech, Pharmaceutical and Telecomm stocks. http://www.currinresearch.com has a few technology reports. http://www.gilder.com is where to sign up for The Gilder Friday Letter. George Gilder has made a name for himself with his technology strategy reports. http://www.gtindex.com tracks Gilder’s recommendations. http://www.wallstreetandtech.com Information Week, a respected magazine in the information technology (IT) world, focuses on information technology for the securities and investment markets. The articles are educational in that they are topical, but they are not likely to be directly useful to us in planning investments.
Small Caps
The definitions of small caps vary but small caps are generally defined as those stocks having a capitalization of a few hundred million to one billion or more dollars. Micro-caps are those with a capitalization of more than about $50 million but less than a few hundred million. http://www.advicetrade.com publishes Small Cap Manager, a monthly newsletter. http://www.allpennystocks.com has numerous articles and news about small cap stocks and the companies behind them. In addition to Bulletin Board stocks many of the companies are low priced stocks listed on the Nasdaq. http://www.investorideas.com says it has big ideas for the small cap investor. It provides links to 14 sites, such as http://www.beveragestocks.com, http://www.homebuilderstocks.com, http://www.RFIDinvesting.com, http://www.China-Asiastocks.com, and http://www.indiastockmarket.com. http://www.peterleeds.com Penny Stocks: The Book is an online primer about less than $2 stocks. http://www.pinksheets.com has education on topics such as "How to Buy or Sell Pink Sheet Stocks" and "Defining the OTC Market and the Pink Sheets". http://www.smallcapreview.com says three-quarters of the 10,000 publicly traded companies in the U.S. have market values below $250 million.
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