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What Are Sector Funds?

Most stocks will be found in sector funds that can range from technology to schools to healthcare and more.

What’s your pick of the week? Normally, you would start with what you understand most and enjoy.

For example: You’re a huge movie goer. Chances are you understand a little about blockbusters, or mergers in the movie industry. Like Disney’s Avengers that brought in over one billion bucks and also their merger with Lucas Films (Star Wars). Such news and huge deals move stocks and the sectors they are in.

You can actually invest in the one particular stock or in the entire sector.

If you’re a long term investor, less than 10% of your portfolio can be in each desired sector or stocks of a sector. And diversification with a few different stocks or sectors is key.

However, if you’re a day trader or swing trader I recommend focusing on one particular sector, with a few  stocks, at a time not to get too overwhelmed with what’s going on in each sector since your goals are to get in and out as quickly and profitably as possible. Then move on to the next sector, or stick to the same one over and over again.

Related Read: Day Trading Vocabulary

What Are Sector Funds?