Sectors and Investing

[rayray]

1. Consumer Staples
2. Consumer Discretionary
3. Energy
4. Financials
5. Healthcare
6. Industrials
7. Technology
8. Utilities
9. Materials
10. Telecommunications (Added after DW reminded me)
11. REITS (Future sector, again DW)


A well diversified portfolio would theoretically be taking advantage of different sectors in order to maximize investment stability and growth for financial independence. Building a well diversified portfolio can take years to accomplish due to cash availability and the cycles of the market. If one takes advantage of DGI, new monies and due diligence in proper stock analysis in order to invest in stable companies at that particular time, financial independence becomes a reality. When an investor see's their monthly dividends grow year after year in addition to the growth of the portfolio it becomes quite rewarding to the point of being truly therapeutic, a sense of accomplishment. The biggest obstacle the average investor has other then cash availability is keeping their emotions in check, pick a good strategy and stick to it through thick and thin.

Of course a lot of this is easier said then done!

What are your thoughts on the different sectors?

Do you happen to favor certain sectors over others and why?

Do you feel properly diversified and if not what sector do you want more exposure to?

[Dividend Watcher]

Forgot Telecommunications (GICS 50 series). Also, S&P will be breaking REITs out from financials in the near future.

[rayray]

Yes I did, I forgot Telecommunications--I was thinking such companies as Verizon/AT&T could almost be a Utility (maybe they were more-so way way back) or even a Technology company in today's world?

And I didn't realize REITS are going to be out from the Financial sector, good to know.


To answer my own questions--Healthcare has been very good to me for almost two decades and I seem to favor Technology and Financial sectors, with a touch of Energy. I just discovered REITS within the last year, really like WPC and want to add NNN/O/VTR/OHI to my portfolio. I don't really have many Consumer Staples since I moved into DGI, entry points have not been co-operating.

[benjamen]

I measure my sector diversification by what % of my dividend income flow comes from each sector (not $ value of stocks held).

I tend to be heavy on consumer staples, healthcare, industrials, and Utilities.
I tend to be light on Technology and consumer discretionary.

[Roadmap2Retire]

I dont tend to prefer certain sectors over others - as I try to leave my emotion out of it. I try to stay fairly balanced, but of late, my utilities exposure is down to near-zero after I sold my ETF. Looking to initiate a position in one (or a few) DG stocks in the sector.

Not having a preference for one over the other sector is what protects investors in downturns - which is the goal of diversification anyway.

[Kerim]

I'm focusing on energy and healthcare right now. I think that historically those have been among the best wealth generators, and (compared to other sectors) both have strong trends in their favor at the moment. Some great energy names are cheap(er) right now due to oil prices, and healthcare enjoys the tailwind of an aging population.

One way I am playing healthcare is through REITs such as HCP and OHI, so I'm never sure whether to account for those in my straight "REIT" bucket or in my "healthcare" bucket. But there are much bigger problems to have!