60% of the price variation of a stock pairs with thel business cycle & sector influences.

40% of the price variation pairs with specific factors of the company.

In Concept, we ask:

1. Where are we in the business cycle?
2. What sectors/industries are strong?
3. What investments hold promise?

When we know the dynamics of sectors then we improve our ROI -- as we move from the top to the bottom & back to the top.

Thus, we move from "economic cycles > sector > stock."  And, we move from bottom-up analysis screens stocks based on the supply/demand of the products & services of a company & technical (charting & quantitative) factors.  

The above may sound simple.  It is not a simple task to improve our ROI.

Some simplify the task by storing their money in a "COD" at their nearest bank.

A sector is different than an industry.  But, many of us use the terms as if they are the same. But, they are not the same.

A sector is a group of industries with similar attributes.

An industry is a group of companies with a similar core business.

The definition is easy.  But, the list of sectors & industries is different from one financial media (like IBD) to another (like the S&P).

Given 10,000 companies, the industries considered to have the same attributes by IBD & the S&P are different.

The S&P 500 is valued for measuring the performance of actual portfolios. Although the 500 companies in the S&P are not the largest companies in market value, the 500 companies tend to lead key industries within the U.S. economy. The market value of companies in the S&P represents about 75% of the aggregate market value of common stocks traded on the NYSE.  But, the companies in the S&P represent about 70% of all U.S. equities.  The S&P 500 consists of 500 companies within 88 Industries and 10 sectors.  Other financial media (like IBD) have a different breakdown.  Another financial media is MoneyCentral.  We use it a lot.

See the sector/industry breakdown for Morningstar data -- summarized on my website and further supported by MoneyCentral.

Sector investing starts with the concept (outlook for the overall U.S. economy) & identifies investments worth buying.