Which Industries you worked or invest in?
Remember during the good old days of high school time, in the learning of basic sciences, classification is one common component among all science subjects, from Physics, Chemistry, and Biology to even Geography.
By using classification, information and knowledge are more manageable. In Chemistry, specifically organic Chemistry, organic compounds are grouped based on their functional groups, and each functional group react in a specific way. Of course, there are a dozen ways to group organic compounds to other features. But as Chemistry is a disciple that deals with the study and prediction of reactions between matters, this method of classification is used.
Similarly, in the selection of stocks, companies are also categorized into different industries and sectors. The distinctive features which differentiate them, other than obvious differences in products and services sold, are that their earnings and profitability are affected in the same ways by certain economic factors.
Consequently, by knowing the business is under which industries and sectors, predictions of when to buy and when to sell are made more accurate. In addition, by considering their roles from macroeconomic point of view, you will have a better feel of whether they are in a sunrise industry, with potential for growth in the long run. Conversely, you better cashed out and exit if demand for their goods and services are heading downwards.
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