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. What happens to the intangible assets of a company when it is bought or sold?

    Discover the best-performing stock market sectors over the past five years and learn which sectors continue to offer high ... Read Answer >>
  2. What are the main benchmarks that track the performance of the financial services ...

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  3. How attractive is the internet sector for a growth investor?

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  4. What's the difference between "top-down" and "bottom-up" investing?

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  5. What percentage of a diversified portfolio should be exposed to the banking sector?

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