By Aniket Bose. Edited by Arjun Chandrasekar.
Stock markets are an equity or share market which is the gathering of sellers and buyers of stocks. These stocks represent ownership rights of the businesses that the seller and buyer are involved with the transaction of the shares. It operates very similar to an auction house, where the stock market allows its buyers and sellers to negotiate the prices of shares and ultimately trade with one another.
There are a total of 11 stock market sectors, but we will be focusing on five of them: Industrials, Consumer Staples, Energy, Real Estate, and Technology.
This sector of the stock markets is often referred to as the backbone of the economy. It is a section of stocks of companies that produce their capital goods that are used in manufacturing and construction. Businesses that are in the industrial goods sector of stock markets provide and sell machinery, equipment, and supplies that are used to develop other goods and services instead of selling them directly to the consumer.
Consumer Staples Sector
This sector of the stock markets’ main function is non-cyclical, which in simple terms means, this sector offers the investors safety and reassurance when there is a recession in the stock market. Because the companies that are a part of the consumer staples sector sell goods like food and cleaning products that customers need regardless of the condition of the economy, they usually tend to generate substantial profits even when the economy is not very strong. It includes companies’ businesses that are less sensitive to the economic cycles of the stock market.
This sector of the stock market is a class of all the companies whose stocks are either related to producing or supplying energy in some manner. The most common types of companies that are a part of the energy sector in stock markets are regularly involved with the research and advancement of oil or gas reserves, oil and gas drilling, and refining. It also includes combined power utility companies such as renewable energy and coal.
Real Estate Sector
This sector of the stock market focuses specifically on equity real estate investment trusts (REITs) that fund primarily in commercial properties like office buildings, apartment complexes, retailers, etc. It offers investors a very good chance to increase their wealth growing opportunities, however, it has a gradual growth overall. The most common companies that are in the real estate sector of the stock markets include American Tower, Public Storage, and Simon Property Group.
This sector of the stock market is the category of the companies’ stocks that are associated with the analysis, development, or even the distribution of technologically based goods and services that companies provide. It comprises businesses that sell goods and services in electronics, software, computers, artificial intelligence, and essentially all the other industries that correspond with information technology. In today’s day and age, this sector of the stock markets has been one of the rapidly growing sectors of the stock markets as it consists of some of the market’s largest companies in the world like Apple, Samsung, Microsoft, Google, Visa, etc.