Stock Market Sectors: Do they make sense? Is it organized chaos? Let’s take a look

So, you must be just as confused as I am about how sectors work in the stock market. Opposed just just trading stocks in companies, you can focus on booming market sectors like energy or technology, making it way more fun to lose your money. There are many classifications of sectors, industry groups, and industries (not to be confused with the industrial sector). But I have many unanswered questions. Where does Automotive go? Is it in industry? What about Tesla? Wouldn’t it be in tech and energy? Idk, let’s take a look.

Luckily, a bunch of people smarter than I came together and organized all stocks into proper sectors called the GICS. In 1999, MSCI and S&P Dow Jones Indices developed the Global Industry Classification Standard (GICS). There are 11 of these sectors, or 12, depending who you ask., not to make things complicated. he GICS structure consists of 11 sectors, 24 industry groups, 69 industries and 158 sub-industries into which S&P has categorized all major public companies. Wikipedia has an awesome table of this.

However, not everyone goes by this list. Stock trading companies like Webull, Robinhood, and others, often label stocks and sectors more accordingly, often accounting for changes in todays markets. This seems to often steer away from the GICS standard.

But for simplicity’s sake, lets look at these 11 (sometimes 12) main sectors.

The Main 11 GICS Sectors

  • Financial
  • Materials
  • Industrial
  • Utilities
  • Energy
  • Real Estate
  • Health Care
  • Consumer Staples (Essentials)
  • Consumer Discretionary (Non-Essentials)
  • Information Technologies
  • Communication Services

Still not 100% where the automotive industry falls into this… or stocks like Good Year, or B & B. I guess B & B would be hospitality. Maybe B & B falls under hospitality, which itself (might) falls under customer services, which is a industry group of Consumer Discretionary. Yes it gets this complicated and more. Many company stocks can fall under multiple sectors. It’s all nonsense. Thats my conclusion. Ty for listening to my TED Talk.