Basics

What is Sector?

A group of companies in the same type of business

Full Explanation

The stock market is divided into sectors — Technology, Healthcare, Finance, Energy, and more. Companies in the same sector tend to move together when news hits their industry.

Real-World Example

Apple, Microsoft, and Nvidia are all in the Technology sector.

Pro Tip

Diversifying across sectors reduces your risk — don't put everything in one industry.

Related Basics Terms

Stock

A tiny piece of ownership in a company

Yield

The income you earn on an investment as a percentage

Market Cap

Total value of a company

ETF

A basket of many stocks in one

View all Basics terms →

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