Shifting Sectors Reflect Social Changes

This week, Craig Siminski, of CMS Retirement Income Planning, shares information on how recent classification changes reflect shifts in the telecommunications sector, and what that might mean to investors:

The way people and businesses communicate has evolved far beyond traditional telecommunications, which is why this sector was redesigned to include networks that facilitate communication (Internet, broadband, cellular, broadcast, cable) and content (information, advertising, entertainment, news, social media).

As a result, a short list of high-profile companies — Google-parent Alphabet, Facebook, Comcast, Disney, and Netflix — now make up a large part of the Communication Services sector.

The GICS is often used as a framework for portfolio construction, so the changes might affect some of your investment decisions.

Sector Funds

A sector fund focuses on stocks of companies in a particular industry or market sector. Depending on your goals, a sector fund may be used to pursue higher returns over time by investing in sectors with greater potential for long-term growth, or to help moderate portfolio risk by investing in sectors that are less volatile or less economically sensitive than the stock market as a whole. In other cases, a sector fund could…

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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 21 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.

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