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Ignore Sector Funds Risk at Your Own Peril

The Definition of ‘Sector Fund’ according to Investopedia :

A stock mutual, exchange-traded or closed-end fund that invests solely in businesses that operate in a particular industry or sector of the economy.  Because the holdings of this type of fund are in the same industry, there is an inherent lack of diversification associated with these funds.

Examples of sectors include:

  • Healthcare
  • Real Estate
  • Energy
  • Technology
  • Utilities

I recently noticed an advertisement in the Wall Street Journal for sector funds that focus on investing in A.I. (Artificial intelligence). While advertisers in the Wall Street Journal and other places focus on the excitement and potential returns of investing in certain sectors, there are risks that are often overlooked. In this short video (approx 2 minutes) Evan Levine, president and founder of complete advisors, explains more.

By | 2017-09-29T18:37:05-04:00 September 29th, 2017|Planning, Sector funds|0 Comments