Embarking on the investing journey can be daunting, especially for those taking their first steps in the stock market. Yahoo Finance contributor Ross Mac joins Wealth! to give tips on how new investors should select sectors and jumpstart a successful investing journey.
For more expert insight and the latest market action, click here to watch this full episode of Wealth!
This post was written by Angel Smith
Video Transcript
Are you looking to get into investing?
But don’t know where to start.
One option could be to focus on a specific sector.
But which sector should you choose?
Yahoo, finance contributor, Ross Mack joins us now to help and share some of his top ideas.
Hey, Ross, how you doing?
Doing phenomenal Brad?
Thanks so much for having me.
I think, you know, when a person is thinking about investing and actually going into a specific sector, one, I always want you to own all the sectors and that’s gonna start, you know, with an ETF but if you’re saying, OK, my next step is I own the overall sector.
Now, I wanna get some alpha.
I wanna go into a particular sector.
I think you always want to start off with what you know, right, what products am I consuming and using on a daily basis?
That can be, you know, just your household, consumer staples, that can be health care.
Another thing I want you to do is actually identify trends, those trends could be technological economic.
I think we all the, you know, what is everybody talking about?
What’s the way of the future that might be artificial intelligence.
Then another thing you got to understand is why, what’s the cyclicality of that sector?
Right.
What’s the demand?
What’s the elasticity of that?
Right.
If you’re thinking about consumer discretionary, ask yourself when we see inflation or if there’s a recession, are people actually gonna still be buying these luxury items?
Another thing to think about what’s when we talk about the way of the future, right?
Are there any kind of political or regulatory shifts?
I think we’ve all heard, you know how big electric vehicles are, but now you’re saying, hey, some states, some countries might be outlawing combustible gas engine cars by the year 2030 year, 2035 or so.
So maybe, you know, you can look at it from that way.
Another thing obviously is just risk assessment, you obviously want to get a sense of just how volatile these particular sectors might be.
Now, if we were to give you an example, right?
Say we were to look at and I think the hottest sector on the planet right now is semiconductors, right?
So you’ve been hearing, OK, I don’t know what NVIDIA is, but I’m hearing about semiconductors.
Exactly.
So what do you do?
I think Google is always gonna be your best friend, right?
So what I would first do is Google, what are semiconductors?
Next, I would say, you know, and a keyword with Google is outlook or forecast.
So the very next thing I would do is say, you know, on Google semiconductor outlook.
Now you’re gonna wanna read up on it, right?
You want to see some reputable names on Wall Street or consulting, right?
You might see and I googled it today just to see what will pop up.
There’s gonna be a Deloitte 2024 outlook.
I would definitely read that the next thing, especially when it comes to, you know, actually investing in the sector, you want to see what ETF S are actually owning this, right?
And so I would literally Google semiconductor, ETF S, then I would literally look at the top 10 holdings.
This is always gonna be your best friend because you’re gonna get a sense of just how many people that I deem smarter than all of us, meaning, right?
People that this is their daily job or you want to see, OK, is Blackrock on this is fidelity owning that.
And then the next thing, right?
Let’s see what that top name is.
Maybe it is NVIDIA, then you want to go to Yahoo Finance.
It literally has some of the best technology when it’s all said and done.
And actually look at what NVIDIA is.
Look at the charts, look at the financials, you want to get a sense of, you know, year over year are they growing?
And then obviously just put on your Google alerts and you just want to continue to become consumed in it, right?
I think we’re conditioned in this society to follow our favorite celebrities and our favorite companies now utilize Google for the same exact reason, utilize Yahoo finance to really take a deep dive and understand how this company is gonna continue to innovate.
And that should actually give you some good advice when you’re moving forward to investing in a sector.
All right, somebody must have shown you the Google alerts that I have set up Ross.
I appreciate it.
Thanks so much.
My man.
Take care.