Topic: How To Invest

What is Pat’s commentary for the week of July 30, 2019

Article Excerpt

Our five-sectors diversification tool is a key part of our three-pronged Successful Investor approach to portfolio management. Here’s a member question that touches on some important aspects of it. Q: Hi, Pat. My question regards your philosophy of spreading investments between most if not all of “the five main sectors”: I’m wondering where each of the 11 broad Global Industry Classification Standard (GICS) sectors commonly used for sector breakdown fit within your framework. They are Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Health Care, Financials, Technology, Communication Services, Utilities, and Real Estate. For instance, I note that pipeline operators such as TC Energy (symbol TRP on Toronto, and formerly TransCanada Corp.) are classified within GICS as Energy companies, or stocks, given that they transport oil and gas. But, within your framework, those pipeline operators fall under Utilities. Also, wondering about Health Care—you refer to Johnson & Johnson (symbol JNJ) as a Consumer stock, whereas GICS slots it into Health Care given its…

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