Sector & Industry Analysis (SIA)

A sector analysis is a study of the economic and financial state and prospects of a certain economic sector. An investor can use sector analysis to make a prediction about how well companies in the sector will perform. Investors that specialize in a specific sector or who utilize a top-down or sector rotation approach to investing generally use sector analysis.

The most promising sectors are chosen first under the top-down strategy, and then the investor evaluates stocks within that sector to choose which ones will be purchased. Investing in specific equities or using sector-based exchange-traded funds can be used to implement a sector rotation strategy (ETFs).

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