Investing Sector Risks

Understanding Industry Risk

 By Julia O’Neal; MA, CPA

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Often also called industry risk, sector risk is the risk of doing better or worse than expected as a result of investment in one sector of the economy instead of another.

Economic Classifications 

A typical economic classification includes capital goods, consumer durables, consumer nondurables, financial, energy, utility, basic materials, technology, retail, and service. There are many more; of course.

Conclusion 

Which sectors do you invest in, and do you appreciate the associated industry risks? 

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