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Filtering by Sector

Not all sectors are created equal. Filtering helps you focus on areas that match your strategy and expertise.

Why Filter by Sector?

1. Expertise

Invest in what you understand:

  • Work in healthcare? You know the industry
  • Tech enthusiast? You understand the products
  • Finance background? Banks make sense to you

2. Strategy Alignment

Different sectors suit different goals:

  • Income: Utilities, REITs (high dividends)
  • Growth: Technology, Healthcare
  • Stability: Consumer Staples
  • Value: Financials, Energy (often cheaper)

3. Diversification

Avoid concentration:

  • Don't put everything in one sector
  • Use filters to find opportunities across sectors
  • Balance your portfolio

The Department Store

A department store has sections: electronics, clothing, home goods.

You don't browse randomly—you go to the section you need. Sector filters work the same way, taking you directly to the stocks that match your interest.

The 11 GICS Sectors

Technology

  • Includes: Software, hardware, semiconductors, IT services
  • Characteristics: High growth, high valuations, innovation-driven
  • Best for: Growth investors

Healthcare

  • Includes: Pharma, biotech, medical devices, healthcare services
  • Characteristics: Defensive with growth potential, patent-driven
  • Best for: Long-term investors

Financials

  • Includes: Banks, insurance, asset managers, fintech
  • Characteristics: Interest rate sensitive, often value-priced
  • Best for: Value and income investors

Consumer Discretionary

  • Includes: Retail, autos, restaurants, entertainment
  • Characteristics: Economic cycle sensitive, consumer-driven
  • Best for: Economic optimists

Consumer Staples

  • Includes: Food, beverages, household products
  • Characteristics: Defensive, stable, dividend-paying
  • Best for: Conservative investors

Industrials

  • Includes: Aerospace, machinery, transportation, construction
  • Characteristics: Economic cycle sensitive, capital intensive
  • Best for: Economic recovery plays

Energy

  • Includes: Oil & gas, energy equipment, renewables
  • Characteristics: Commodity-driven, volatile, often high dividends
  • Best for: Commodity bulls, income seekers

Materials

  • Includes: Chemicals, metals, mining, packaging
  • Characteristics: Commodity-driven, cyclical
  • Best for: Inflation hedges

Utilities

  • Includes: Electric, gas, water utilities
  • Characteristics: Stable, regulated, high dividends
  • Best for: Income investors

Real Estate

  • Includes: REITs, real estate services
  • Characteristics: Interest rate sensitive, high dividends
  • Best for: Income and diversification

Communication Services

  • Includes: Telecom, media, entertainment, social media
  • Characteristics: Mixed (stable telecom + growth media)
  • Best for: Varies by sub-sector

Key Takeaways

  • Filter by sector to focus on your areas of expertise
  • Different sectors suit different investment strategies
  • Use sector filters for diversification
  • Understand sector characteristics before investing

How to Use Sector Filters

Step 1: Choose Your Sector

Based on:

  • Your expertise
  • Your strategy
  • Portfolio needs

Step 2: Review Top Stocks

  • Check the sector leaderboard
  • Note the top 10-20 stocks
  • Compare scores and signals

Step 3: Dive Deeper

  • Click through to interesting stocks
  • Read full analysis
  • Compare alternatives

Step 4: Build Watchlist

  • Save promising candidates
  • Track over time
  • Act when ready

Sector Rotation Strategy

Some investors rotate between sectors based on economic cycles:

  • Early recovery: Financials, Industrials
  • Mid-cycle: Technology, Consumer Discretionary
  • Late cycle: Energy, Materials
  • Recession: Utilities, Consumer Staples, Healthcare

This is advanced but can enhance returns.

Sector Filter Tips

Do:

  • Focus on 2-3 sectors you understand well
  • Compare top stocks within a sector
  • Use sector context for score interpretation
  • Check sector trends before investing

Don't:

  • Invest in sectors you don't understand
  • Ignore sector-wide risks
  • Over-concentrate in one sector
  • Assume all sectors behave the same

Sector Filtering Traps

  • Only looking at "hot" sectors
  • Ignoring out-of-favor sectors (often where value is)
  • Not understanding sector-specific risks
  • Comparing stocks across different sectors

Next up: Building a watchlist—tracking your candidates.

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