Why Investors Need to Focus on Specific Sectors

As the economy continues to recover from the COVID-19 pandemic, certain sectors will exhibit different recovery rates. The importance of sector-specific investing strategies is more pertinent today than it than in the past for those looking to take advantage of the economic recovery coming out of this mess.

In this article, I'm going to discuss a couple of specific sectors investors should monitor.

One sector I've been keeping a close eye on of late is the retail sector, as many Canadian companies’ financial results are tied to the strength of the Canadian consumer. Despite record levels of household debt and deteriorating debt to disposable income ratios, Canadians and Americans alike saw record retail sales increases on a month-over-month basis in May following one of the sharpest month or month declines in history we witnessed in April.

Those investing in consumer discretionary stocks ought to keep a close eye on the data released on the sector.

Similarly, sectors such as infrastructure that are dependent on government spending for growth could see significant upticks in investment as governments ramp up infrastructure projects, in a bid to shore up job losses and political favor as elections loom in the U.S. and Canada.

Observing incoming data on government spending and monetary policy measures are key for any investments in the sector.

Invest wisely, my friends.