Sector Analysis

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DEFINITION of 'Sector Analysis'

A review and assessment of the current condition and future prospects of a given sector of the economy. Sector analysis serves to provide an investor with an idea of how well a given group of companies are expected to perform as a whole.

BREAKING DOWN 'Sector Analysis'

Sector analysis is typically employed by investors who are practicing a sector-rotation strategy, or by those who are using a top-down approach to selecting stock to invest in. In the top-down approach to investing, the most promising sectors are identified first, and then the investor reviews the companies within that sector to determine which individual stocks will ultimately be purchased.

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RELATED FAQS
  1. How does seasonality affect the forest products sector?

    The concept of seasonality comes from the analysis of time series data. A certain data set demonstrates characteristics that ... Read Full Answer >>
  2. What is the difference between an industry and a sector?

    The terms industry and sector are often used interchangeably to describe a group of companies that operate in the same segment ... Read Full Answer >>
  3. What's the difference between "top-down" and "bottom-up" investing?

    Before we look at the differences between top-down and bottom-up investing, we should make it clear that both of these approaches ... Read Full Answer >>
  4. Where do penny stocks trade?

    Generally, penny stocks are traded through the use of the Over the Counter Bulletin Board (OTCBB) and through pink sheets. ... Read Full Answer >>
  5. Where can I buy penny stocks?

    Some penny stocks, those using the definition of trading for less than $5 per share, are traded on regular exchanges such ... Read Full Answer >>
  6. How does the stock market react to changes in the Federal Funds Rate?

    The stock market reacts to changes in the federal funds rate in various ways depending on where it is in the business cycle. ... Read Full Answer >>

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