What are financial sector stocks?

*All data is sourced from StockRover, current as of June 6, 2024. Financial sector stocks belong to companies that offer investment banking, consumer banking, lending, insurance or credit card services. While banks are a big part of the story, they’re hardly the only sort of companies active in this key stock market sector.

Are financial stocks a good investment?

Because the financial sector forms the core of the global economy, investors should strongly consider making financial stocks an important part of their portfolios. To help with your research into the best financial stocks, Forbes Advisor has compiled profiles of the 10 largest financial stocks by market capitalization.

Why are financial stocks cyclical & sensitive to economic downturns?

Financial stocks are cyclical and sensitive to economic downturns. When people and businesses are struggling, they take out fewer loans, invest less and spend less on their credit cards, reducing revenue for financial companies. Not to mention, they may stop making payments on their existing loans. Loan defaults can strain balance sheets.