In this multi-part, shallow dive into investing and my own investments in the stock market, I highlight those industries in the following two sectors:
Industrials – This sector, I understand, like Communications, Discretionaries and Financials, makes up ~10% of the market. It consists of businesses that keep everyone and everything safe, sound and moving around, and all the waste generated by our activity out of sight and mind. Others manufacture industrial equipment, machinery and construction materials in support of all this activity, and all are influenced by economic conditions, infrastructure spending, technological advancements and global trade.
3M, a conglomerate, which I owned shares in until recently, operates in a number of subsectors and, along with others like Honeywell, are found in this segment bearing the name.
The Aerospace and Defense segment includes aircraft manufacturers, defense contractors and providers of aerospace components like Lockheed Martin, Northrop Grumman and RTX, along with Honeywell.
The next subset; Farm and Heavy Construction Machinery, is composed of the likes of Caterpillar and Deere, and along with Specialty Industrial Machinery companies Ingersoll Rand and Parker-Hannifin, manufacture equipment and machinery used in agriculture, construction, manufacturing and mining.
Another subset; Engineering and Construction, groups together companies like AECOM and KBR, that provide services relating to construction, engineering and infrastructure projects through their collective building construction, civil engineering and project management expertise.
Another segment of this sector; Railroads, features Canadian transcontinental railways CNR and CPKC. As these companies’ services are in demand – and their stocks also provide dividends – I own stakes in them, along with Specialty Business Services’ titan Thomson Reuters, and the Waste Management segment’s Waste Connections.
Materials – I understand this sector, which, like Energies, Real Estate and Utilities, makes up ~3% of the market, and consists of businesses that supply other sectors with the raw materials they need and the precious metals that many of us covet. They produce chemicals, metals and minerals, as well as forestry and agricultural products used in the construction, manufacturing, packaging and farming industries. Like some other sectors’ businesses, these enterprises are also affected by cyclical trends, economic growth, environmental regulations, industrial demand and industry risks, along with always-volatile commodity prices.
The Chemicals segment comprises the likes of Dow and the Specialty Chemicals’ LyondellBasell – both of which I used to own shares in – that produce and supply chemicals used in agricultural, overall industrial and specialty specific applications. Another segment; Agricultural Inputs, features Canadian growth and dividend juggernaut Nutrien, which provides crop inputs and services to the world. Other companies in this sector are Cleveland-Cliffs (Steel), Freeport-McMoRan (Copper), Agnico Eagle Mines and Wheaton Precious Metals (Gold), all engaged in the extraction/production of metals/minerals.
Building Materials segment companies, such as CEMEX and CRH, provide aggregates and other building materials and related services used in infrastructure initiatives and residential and commercial construction projects alike.
In part seven, I’ll cover the Real Estate and Staples sectors and how I have invested in them both directly and through the use of ETFs.
Disclaimer: The information contained herein should not be construed or considered professional advice. Nonetheless, thanks for reading! If it resonates, there’s “plenty more where that came from” on Facebook, Instagram, YouTube ‘n’ Twitter.