My Stock Market Savvy (3)
If you want to stay in the game, you have to diversity your portfolio.
9 sectors for your Portfolio
1. Basic Material
industry leader, Aluminum, Oil & Gas, Gold, steel; the first group to react to economy
2. Conglomerates
Very diversified company, act like one stock mutual fund.
GE, 3M; it is hard to get all information at once
3. Consumer Goods – defense type
Drinks, Tooth Paste, Auto, Home Furnishings, Clothes, Cleaning Products
When it is bearish market, this sector holds very strong
4. Financial
Banks, Thrift, Insurance, Investment Broker, Trust; very sensitive to interest rate and economy; FED will more likely hold the key interest rate steady at this meeting.
Citigroup, American Express, Bank of America, AIG, Wachovia, JP Morgan, Wells Fargo, US bankcorp etc.
5. Health Care – defensive type
Biotech, Drug Related, Hospital, Drug stores/ Manufactory; in general, it takes 10 years and $100M to develop a
drug; so make sure to buy big drug company which has strong assets to support its R&D. Pfizer, Merk
6. Industrial Goods - defensive type
Air Space, building material
Good for beginning of good economy
7. Services – defensive or offensive
Advertisement, Freight, Auto Dealer, Broadcasting, Catalog, Education, Gaming Entertainment, Books, Retails
People are the assets of these companies; so research on management team would help
8. Technology – Offensive or defensive
High Tech, Green company stocks are tend to be popular when economy is good; more investment will move to these companies.
Energy efficient tech companies could move ahead of the market right now.
9. Utilities – very defensive
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