Wednesday, March 2, 2011

Investing 101: Sector Trends (pt 5)

I know I still owe you guys a pt 4 of my Investing 101 series on 'Performance Metrics' but since I haven't been investing any new money in a while I kinda forgot about it altogether but when I seen this Edelman’s 11th annual Trust Barometer survey showing the tech industry is a clear 10 percent ahead of the rest of the corporate world in terms of trust it got me to wake back up.
The results come from the polling of 5,075 “informed” members of the public from 23 nations, so that means that the entire world is in on this and the poll is not just expressing an american sentiment.
Nonetheless...the main point here is that when investing, the electricity of a particular sector can generate just as much if not more revenue growth than the products or business stories that you are aware of themselves. Often there are many company stocks that have tremendous run-ups while their overall sector often lags behind so it is important to remember that in these cases these are individual stories rather overall market ones.

How do whole sectors improve you ask? Well honestly the same way sectors simultaneously go this case the knowledge of current events and situational awareness of whats going on is everything. In retail, during the holiday season is obvious, during wars defense spending goes up, when the economy is flourishing home ownership, governmental regulation, etc. However to take the ultimate advantage of this and to get ahead of the power curve you've just got to be able to anticipate the "next thing" or identify the trend for whats coming up next so you can buy the stocks low and sell high. So it is construction in China? mobile and wireless technology? health care reform?...well you tell me but ultimately the key is to stay on the grind, do ya homework, and invest in stories that you believe in...think about makes sense doesn't it?

Part 1 : The Basics | Part 2: Buying/Selling | Part 3: Know the Ledge |
Part 4: Performance Metrics (Coming Soon)

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