Evaluating stocks, bonds, mutual funds and ETFs is essential before investing. Most people know to look at financial statement data, ratios and valuation statistics, technical analysis charts and analyst opinions, but you can learn a lot about a potential investment by researching the investment’s industry and sector.
An industry is a classification that refers to a group of companies that are related in terms of their primary business activities. Industries are then grouped into larger categories called sectors. Examples of sector classifications are broad categories like consumer goods or energy; industry classifications are narrower, such as semiconductors or mortgage investments.
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