There is no guarantee that any sector of the economy is immune from tumbling share prices but this guide might help you to decide which are the safer areas to consider investing money in should you want to try your hand at share dealing.
As a commodity that everyone buys daily, the publicly listed companies on the stock exchange who trade in food would seem to be the safer bets. I say “bets” because investing in shares is still, no matter which company you are investing your money in, a gamble. Any company has the potential to struggle, or at least lose their grip on the competition, in an ever-changing economy and one where international trade is possible.
Information Technology and Communication Services
The computer always has been the future and so are areas where future gains are possible. With this, though, is the problem that if a company does not keep up with the latest technologies then they can very quickly be left behind. Areas that have grown rapidly in the last few years are the mobile phone sector and digital marketing. The trick is to envisage where future development might happen and then become popular worldwide, and so invest in a company developing that. For instance, Amstrad in the 80s saw a niche in producing affordable home computers. Those setting up the earliest mobile phone shops have become very wealthy from that. In a way, share dealing is predicting the future. Newspapers such as the Financial Times keep share dealers up to date with the latest news from companies. What you read is only a part of the story, though.
Health can include any companies making health-related products and, in addition, pharmaceutical companies. Most people are concerned, even pre-occupied, with their health. This makes this sector a particularly buoyant one to invest in. Cures or ways of suppressing and managing illnesses are constantly being discovered and leading to new products to treat them. Doctors are keen to treat their patients with the latest wonder drug and it is in their Hippocratic oath to do their very best for every patient. With regards to other products that aid health, there is a whole market of products that allow people to better live their lives while managing a medical condition, and who would not want to improve their quality of life? So, as you can see, this market is a growing one to invest in.
Investment companies are in constant demand from those needing to borrow money, even governments. Although a volatile market, there are plenty of gains to be made when markets rise that have been invested in during a low period. In this case, everyone is a winner. However, as a cautionary note, it is a very competitive market that is reliant on reputation and much luck. Reputations can be easily lost. Luck can run out. Expertise does not guarantee success where there is unpredictability.
All areas of manufacturing are subject to consumer demand. This makes them liable to market fluctuations that may see a company do well one year and then struggle the next. If consumers are struggling financially then they do not have the spare cash for purchasing luxury items. This, therefore, may represent one of the riskier areas to invest in. Very high-end products may be safer to invest in than those that just have an element of luxury attached to them and have been purchased in the past by those who can only just about afford them.
To conclude, a sector that you will note I have not included is Retail. This is because they are going through a particularly difficult time at present. Those companies who have not prepared adequately for a rise in internet sales and have a multitude of high street shops to stock, continue to be the worst affected. Internet shopping has become so easy. With a few simple clicks, you can have an item selected, paid for, and on the way to you. Then it can be delivered directly to your door, or if you are not likely to be in, to a collection point for you to pick-up later. Shopping has never been easier.