The financial sector makes up 13.7% of the S&P 500, making it the third-largest sector in the market out of eleven. That means it’s important for you to know what makes up the financial sector and how you should invest in it.
When you think of financials, or specifically financial services, what do you think of? You probably think of suits and ties on Wall Street. You probably think of companies like JP Morgan, Bank of America, Prudential, and of course, Hoffman Financial Group!
It may sound strange that as part of your S&P 500 portfolio, you can invest your money back into the same companies that are often investing your money. The financial sector is unique in this way because it’s self-circulating. But the truth is the financial sector is going to be a mainstay in your portfolio, no matter if you’re looking to retire soon or if you’re younger and just wanting to invest. The financial sector is going to be a big piece of the puzzle for your investment criteria.
Again, you probably think of large banks when you think of stocks in the financial sector. But you might be forgetting to consider insurance companies. Companies like Aflac, Allstate, Metlife, The Travelers Companies, and more make a huge impact on the sector alone.
The financial sector of the S&P 500 isn’t going anywhere for a long time. These are solid, grounded banks and firms with immense financial backing and strength. That won’t always mean you should invest in the financial sector because everyone’s investing situation is different, and timing is everything. Our retirement planning blogs and financial services in Atlanta can help you decide if focusing your investments on the financial sector is the right thing for your retirement and stocks!