While investors have enjoyed gains in the S&P 500 which traditionally gives them access to 500 of the largest publicly-traded companies in the United States, different sectors have also gained interest, especially with the market showing signs of stagnation. Traders and investors are usually opened to new investment opportunities and it is always recommended not to keep all your eggs in one basket and diversify your portfolio. This is why, in this article we take a look at various stock sectors that have shown potential to outperform the general market.
For example, many traders have turned to two stock sectors that have gained increasing attention, especially during the current coronavirus pandemic. Technology stocks and health care stocks are both considered to be essential parts to the general economy and tend to attract investor capital.
This fact alone pushes stock prices in these two sectors higher despite the state of the economy or regardless the way financial markets are performing. While forex traders usually focus on trading or exchanging USD to GBP and GBP to USD, stock traders have recently turned to these two sectors as well as the energy sector as discussed below.
Energy stocks have been doing quite well this year. Especially, clean energy stocks have been very popular as traders have expected that President Joe Biden’s infrastructure plan will impact on a number of stocks in the energy sector.Biden’s American Jobs Plan will seek to support various areas with targeted investment including fixing transportation systems and infrastructure, building a renewed electric grid, providing high-speed broadband to all Americans, building and preserving more than 2 million homes and commercial buildings, upgrading veterans’ hospitals and revitalising manufacturing and securing US supply chains, among many others.
This is why, many traders are interested in clean energy stocks such as Gevo (NASDAQ:GEVO) which is a company in the renewable fuels space, and ChargePoint (NYSE:CHPT), which is an EV charging infrastructure company.
As one of the most popular stock sectors, healthcare stocks perform well in general as demand for healthcare is always high and stable despite of what is happening in the economy or the financial markets. At the same time, the sector has shown a steady increase in revenues because of the lifesaving capabilities provided by the industry and the continued financial support it has enjoyed. From hospitals to makers of specialty medical devices and equipment, pharma and biotech companies, the sector is wide-ranging. The industry is also closely knit with technological advancements which has also helped to boost industry revenues.
The technology sector has been a very healthy one due to ongoing technological improvements. This is why technology stocks have performed well during market advances. The sector includes information technology (IT) companies, internet-related firms, and high-tech devices’ companies. Companies manufacturing computer hardware, software and semiconductors are also part of the sector.Recently, tech stocks have reached new highs, following an announcement from the White House about President Joe Biden’s multitrillion-dollar US stimulus plan that will offer funding for scientific research and broadband as well as infrastructure and healthcare.
With more financial support provided to these sectors and the increasing importance they demonstrate in saving and improving human lives, these stock sectors are expected to continue to perform well.