Joshua Rodriguez has worked in the finance and investing industry for more than a decade. In 2012, he decided he was ready to break free from the 9 to 5 rat race. By 2013, he became his own boss and hasn’t looked back since. Today, Joshua enjoys sharing his experience and expertise with up and comers to help enrich the financial lives of the masses rather than fuel the ongoing economic divide. When he’s not writing, helping up and comers in the freelance industry, and making his own investments and wise financial decisions, Joshua enjoys spending time with his wife, son, daughter, and eight large breed dogs. See what Joshua is up to by following his Twitter or contact him through his website, CNA Finance.""The service sector is vast, covering any company that provides a service to its customers. Some of the most common examples of service companies include:
- Technology. Technology is one of the biggest subsets of the service industry. This is the subsector in which e-commerce, web and database hosting, artificial intelligence, cloud computing, and other technology based services live.
- Medical. Medical services is a subset of the service sector that centers around delivery of health care. Hospitals, at-home medical services, nursing homes, and other similar services are found within this category.
- Utility. Utility services are another massive subset of the service sector. These companies provide the basic utilities that most people simply couldn’t live without. They provide electricity, water and wastewater, garbage pickup, and other simple necessities to consumers.
- Financial. Financial services encompass a wide range of services revolving around money. These include banks, investment brokers, hedge funds, budgeting applications, and any other service that involves the management or movement of money.
- Media. Media is also a cornerstone within the service industry. News companies, social media companies, and entertainment companies all fall within this category. One of the largest members of the media category is Disney, which owns ABC, ESPN, and other major TV networks in addition to many popular film franchises.
- Transportation. Finally, transportation services are another major category within the service sector. Airlines, bus lines, taxis, and peer-to-peer rideshare programs are all included in the transportation subset of the service industry.
- Consumer Discretionary Services. Consumer discretionary services are not essential to day-to-day life, but they’re desirable if there’s enough income to cover them. For example, cable services, piano lessons, and gym memberships all fall into the consumer discretionary services category.""""
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"Service Stock Pros"
- . When something is cool enough to keep you interested, the sky’s the limit in terms of research you can do to understand a company that delivers an exciting or important service.
2. Stable Growth and Dividends
- Utilities companies provide the very basic necessities that consumers need in order to be comfortable, making them consumer staple services. Heating and cooling, water, and waste services are all basic parts of life that most take for granted. But they are all big business. Moreover, these are largely recession-proof companies.
3. Diversified Investment Options
- The unique diversification opportunities brought to the table are unmatched by any other sector. There’s a high level of value in that fact
- The unique diversification opportunities brought to the table are unmatched by any other sector. There’s a high level of value in that fact
4. The Feel-Good Factor
- Not only is medicine a profitable industry that offers up a strong investment opportunity, but, when you invest in the space, you can go to sleep at night knowing that your activity in the stock market is funding the companies that keep your community healthy and provide comfort and care to the sick.
Service Stock Cons
1. Services Evolve
- So, when investing in the service space, it’s important to stay ahead of consumer trends.
2. The Sector Is So Big It’s Hard to Navigate
- As such, you may find it difficult to pin down stock picks within the sector that are a good fit for your portfolio without extensive research.
3. Educating Yourself on the Entire Sector Is Difficult
- it’s best to pay attention to each individual subset of the service sector. For example, if you have a strong understanding of retailers or travel services, it’s best to keep your investment activities centered around these categories.
- If you’re looking into utilities stocks that provide safe, stable growth with strong dividends, and your goal is stable growth with a side of income, any time is a good time.
- If you’re looking into utilities stocks that provide safe, stable growth with strong dividends, and your goal is stable growth with a side of income, any time is a good time.
- Noncyclical Service Stocks. Noncyclical service stocks, like consumer staples, are stocks that tend to see more stable growth and are not as affected by economic conditions. Not only are these stocks known for stable growth, they tend to pay strong dividends, making them great income plays. If steady growth and income are what you’re looking for, any time is a good time to invest in these. Also, if you’re looking for momentum when momentum is high and safe havens when declines are ahead, noncyclical service stocks are best when economic conditions start to take a turn for the worse.
- Nonetheless, as you invest, it’s important to keep diversification in mind. If you choose to invest 100% of your stock allocation in service stocks, make sure that your portfolio is highly diversified within the sector. If your appetite for risk is high, consider a higher ratio of cyclical service stocks to noncyclical service stocks. If you’re looking for lower risk and stable gains, make sure that your portfolio is weighted heavily toward the cyclical side of the equation.
- this is a great way to gain widespread exposure to the industry. Some quality providers of service-focused investment-grade funds include Vanguard, iShares by Blackrock, and ProShares.
- As with any other sector, it’s important to diversify your investments and do your research before risking your first dime in the service sector. Nonetheless, if you take the time to do so, the rewards you experience could be incredible.""""
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