The sector that a company operates in can have a significant impact upon the performance of it’s stock. This is because some sector has more opportunities to grow than others.
Technology is widely considered to be the best performing sector in terms of stock market returns, which is the case because consumer demands are constantly changing.
Sectors that have a lot of opportunities for change are also riskier. This is because companies have to constantly keep up with the latest trends. If they don’t, they can lose market share to their competitors.
More stable sectors have fewer opportunities to grow and tend to deliver more stable returns on the stock market. Examples of such sectors could include industrials, healthcare and finance.
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