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Shares by industry

Shares by industry

iFOREX offers a wide variety of shares, across a number of industries, that you can trade in the form of CFDs. Knowledge of the basics of each industry and its given characteristics can assist you in identifying opportunities as they occur, and help you make educated investment decisions.

Let's start with the basics…
Share investment - buying and selling Share CFDs of leading brands such as Facebook, Adidas, Apple, BMW and Google, with the intention of taking advantage of their price movements, whether they move up or down.

Industry - an area of the economy in which businesses share the same, similar, or a related product or service.

Bank Shares

Bank Shares

The financial services industry has been around for hundreds of years, and banking services have become an absolutely essential part of everyone's lives. It is a vital component in individual, business, national, and global financial trends. This industry builds and maintains both commercial and private financial relationships with customers of all sizes to supply financial products and services that stimulate economic growth. The industry supplies a multitude of services from savings accounts to home and business loans, payment services and more. The banking industry is sensitive to regulatory, technological, and economic factors, constantly challenging traditional ways of doing business. With each new generation of customers demanding faster and more innovative products, the industry players are adopting new strategies to overcome these challenges and move forward to deliver financial objectives to people and organizations.

Examples:
HSBC, Deutsche Bank, Citigroup, Banco Santander, Monte Dei Paschi and VTB Bank.

Transportation industry shares

Transportation industry shares

Transportation industry shares

The transportation industry can be summarised as encompassing all those businesses that move people or goods, by land, sea, or air, from one point to another. It includes everything from municipal buses, subway and commuter-train systems, to the container ships that transport goods from port-to-port all around the globe; from the rail and trucking networks that move those containers across states, countries, and continents, through to the airliners we use to fly to destinations near and far for work and pleasure, to the express shipping and courier companies. It is well-known that the performance of the transportation sector is sensitive to the price of oil. A price change in oil directly affects the earnings and development of this industry.

Examples:
Boeing, Airbus, Toyota, Lufthansa, Continental.

TV industry shares

TV industry shares

Companies in this industry broadcast television programmes for free or for cable subscribers. Large companies have the advantage of market dominance, often owning the only TV stations in a geographic area. Small companies can compete effectively with special programming that attracts a targeted audience. The profitability of individual companies depends on advertising volume, programme mix, and efficiency of operations, as business advertising, programme popularity, and consumer demographics drive demand. The industry's major product lines are broadcasts (air time) and programming, production, and post-production services. Other sources of revenue include programme rights, merchandise sales, and sales of website advertising space.

Examples:
Disney, Netflix, Sony and Mediaset.

Food & Drinks industry shares

Food & Drinks industry shares

Food & Drinks industry shares

Businesses and organizations that produce, manage, regulate, and distribute food and beverages comprise the food and beverage industry. It is an essential part of society which has always played a central part in our lives, as food and beverages are a fundamental human need. The Food Industry is a complex, global collective of diverse businesses that supply most of the food consumed by the world population - from farming and food production, packaging and distribution, to retail and catering. Companies operating in today's global food and beverage sector must adapt to an increasingly competitive environment and, at the same time, navigate an ever increasingly complex array of industry-specific regulatory requirements.

Examples:
McDonald's, Coca-Cola, Pepsi and Danone.

Tech industry shares

Tech industry shares

A multitude of companies are busy creating the next innovation right now, only so that they may steal the focus for a short period of time and improve their company's share performance. Companies like Apple, LG and Samsung to name a few of the larger tech companies, are in a constant battle over mobile communication market share size, bringing out their latest developments almost annually to maintain their status and their share price valuation. Lately, these tech innovations are becoming snagged by necessary legal regulations, as they deal mostly with people's privacy and data. Many of the legal challenges facing IT are being driven by the transformation of software, mobile and cloud computing technologies, which have and continue to become critical in almost every industry.

When following this industry, one must take into consideration the new product announcement schedule, which history proves, heavily affects share prices.

Communications industry shares

Communications industry shares

The communications industry, broadly defined, is the business of conveying information. Although communication dates to the beginning of human history, the term generally refers to mass communications. As such, it covers television and radio broadcasting, telegraphs, publishing, advertising, telecommunications, motion pictures, home videos, public relations, computer databases, and other information industries.

Communications industry shares

Over the past decade, technological innovations in the Communications sector have triggered profound changes in how people communicate. With the introduction of high-speed networks, digital content and mobile devices, consumers now choose how, when and where their content is delivered. The communications industry has become a complex battlefield for communications service providers. They not only feel the squeeze of competition from giant telecommunications providers, but also giant digital disruptors that offer alternative communication channels, such as WhatsApp (Facebook) and Skype (Microsoft).

Examples:
Google, Facebook, Vodafone and Orange.

Apparel industry shares
Apparel industry shares

The fashion and apparel industry encompasses a wide variety of garments and uses almost every type of textile manufactured. The global apparel market is valued at 3 trillion dollars, and accounts for 2 percent of the world's Gross Domestic Product (GDP). Buyers have large amounts of indirect power to bargain with (i.e. plenty of choice — and lots of competitors make it hard to sustain a place in the market).

The Garment Manufacturing Industry and the Garment Companies in developed countries are always on the lookout for cheaper sources of garment production and - in recent years - this has led to the establishment of a strong clothing Industry in low cost countries, mainly located in Asia.

Examples:
Adidas, Louis Vuitton, Inditex (Zara) and Fast Retailing (Uniqlo).

Healthcare industry shares
Healthcare industry shares

Healthcare industry shares

People are living longer and thus demand more and higher quality preventive and long-term care. Although the consumer (or patient) interacts mainly with his physician, it is the health-care organization itself - that is the hospital or health management organization (HMO) - that finances much of the industry today.

Expected drivers of growth in this sector are an aging population, rising wealth, lengthening life expectancy, population growth, an increase in chronic diseases, while expected constraints to growth are government reforms, value-based care and cost pressures.

The GDP spent on health care globally is expected to decrease by 2019, with ongoing economic uncertainty, the Eurozone Crisis and currency devaluation all expected to impact global spending on health.

Examples:
Bayer, Pfizer, Sanofi and Johnson & Johnson.

How do industries affect each other?

When one industry is flourishing, it could mean good or bad news for another. Likewise, innovation in a particular industry could have a chain reaction effect across multiple industries.
Some examples:

  • If oil prices go down, transportation companies will benefit from low operational costs, while global e-commerce companies such as Amazon could offer shipping at lower costs.
  • Banks could profit when lending money for the tech and pharma industries' research and development. Banks may also take a hit from tech innovations such as peer-to-peer lending, crowd-funding, or the rise of e-commerce, which is reducing the need for the brick-and-mortar commercial development projects, traditionally backed by bank loans.
  • New tech advancements can broaden the scope of the services provided by communications and TV companies, while also biting into their market share with disruptive innovations such as mobile viewing and free calling services.
How to choose the right industry / share CFDs to invest in

It isn't so much a case of choosing the 'correct' industry or sector to invest in, but more choosing the right industry at the right time. Rotating your investments with the economic cycle can pay off, while diversifying your investments can potentially reduce risk.

Each sector within a market has a different optimal moment for trading in the economic cycle. This isn’t an exact science, but general trends can be useful as we gather information to support our decisions.

A good place to start is historical market data. By looking closely at historical results, we can identify performance patterns to see where selected industries are at their most profitable in their business cycle and when they generate the most returns:

  1. Identify the sectors that are currently performing well, which could be a strong indicator of the wider economy’s performance.
  2. Employ some technical analysis. For example, look at the charts and historical performance in different months or in close proximity to global or industry events.
  3. Use indicators such index performance, which could signal the rise or decline of a specific sector or a group.
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