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Sectors are for the most part an arbitrary grouping of stocks whose companies compete in the same market.

Many financial institutions have made up their own sectors and analysts are assigned to study and follow them. You are also welcome to come up with your own sectors. You may also notice that sometimes sectors are sub-divided into industries by some financial institutions. While sectors may not tell us much about individual stocks, they offer us a better view on how one group of companies is faring versus others. Perhaps a certain industry may emerge as a dominant industry for a period of time and rather than investing in one company, investors can consider investing in the whole industry or its major players. Sectors also allow us to focus our attention only on those companies that play in the same industry without distraction from companies in other sectors. It makes it easier to identify those companies that are competing more effectively and perhaps to select candidates for investment. While there are no concrete standards on the number or types of sectors, some have emerged as more popular than others. After all, we have to agree on some things sometimes. The following is a typically accepted list of sectors, which incidentally is also published by Dow Jones. …