The 11 Sectors of the Market
Every stock belongs to one of 11 official sectors. Understanding these helps you build a balanced portfolio and anticipate how stocks will react to news.
| Sector | What It Is | Example Companies |
|---|---|---|
| Technology | Software, hardware, semiconductors | Apple, Microsoft, NVIDIA |
| Healthcare | Drugs, devices, hospitals, insurance | Johnson & Johnson, Pfizer, UnitedHealth |
| Financials | Banks, insurance, credit cards | JPMorgan, Goldman Sachs, Visa |
| Consumer Discretionary | Things people want (not need) | Amazon, Tesla, Nike |
| Consumer Staples | Things people always buy | Coca-Cola, Procter & Gamble, Walmart |
| Communication Services | Media, telecom, social networks | Alphabet (Google), Meta, Netflix |
| Industrials | Manufacturing, airlines, defense | Boeing, Caterpillar, Union Pacific |
| Energy | Oil, gas, renewables | ExxonMobil, Chevron, NextEra |
| Utilities | Electric, gas, water providers | Duke Energy, Dominion, Southern Co |
| Materials | Chemicals, mining, metals | Linde, Newmont, Freeport-McMoRan |
| Real Estate | REITs, property companies | American Tower, Prologis, Realty Income |
Cyclical vs Defensive
Sectors fall into two big buckets based on how they behave in the economy:
Cyclical sectors boom in good times and suffer in recessions:
- Consumer Discretionary, Industrials, Financials, Energy, Materials, Tech
Defensive sectors hold up because people need their products no matter what:
- Consumer Staples, Healthcare, Utilities
Why Sectors Matter for FSL
If you draft 5 tech stocks and tech has a bad quarter, your whole team suffers. If you spread picks across sectors, a hit in one sector can be offset by gains in another.
A smart draft often includes:
- 1–2 tech names (growth)
- 1 healthcare (defensive growth)
- 1 financial (cyclical upside)
- 1 consumer staple (stability)
- 1 wildcard sector play based on current news
Diversification isn't just about having many stocks — it's about having stocks that don't all move together.