Many financial gurus, websites and blogs have pointed out individual stocks that are good to invest in for 2011. Most people follow that when they select an individual stock. Thats fine and dandy. However, there is another way to make selection for your investments. First of all, select an industry. That way you can make a conscientious decision about investing.

This has also been a better strategy for diversification of your assets allocation. And in good times and bad times, diversification is the key to successful investment.

Investment types

Any industry has three major parts to it for investing. Most folks invest in one or all of the following:

You can further divide each type of investment into two kinds:

• Domestic (U.S.)
• International

Markets

Almost all industries, in turn, have multiple markets to invest in. So selecting an industry and then a market in that industry gives you a better investment strategy for diversification.

Some financial gurus advise to select industries for investing that are mutually exclusive. In other words, they are independent of each other. So if your investment is not doing well in the market of one industry, it will have no effect on another market in another industry of your choosing.

Obviously, you have access to information online. Educate yourself as much as possible.

As always, if you want to be on a path of financial success:

Industry types

Choose an industry which you believe in. For example, if you are into environmentally preferable products and services, then look for those companies that belong to the green industry .

You can break each top-level industry further down by clicking on it.

Banks

Banks safeguard money and valuables and provide loans, credit, and payment services, such as checking accounts, money orders, and cashier’s checks. Banks may also offer investment and insurance products, which they were once prohibited from selling.

Financial Services

The finance industry encompasses a broad range of organizations that deal with the management of money.

• Asset Managers
• Consumer Finance
• Specialty Finance
• Financial Services
• Mortgage Finance

Insurance

In simple terms, insurance is guaranteed small loss to prevent a large, possibly devastating loss.

• Life Insurance
• Non-Life Insurance

• Full Line Insurance
• Insurance Brokers
• Property & Casualty Insurance
• Reinsurance

Real Estate

Unlike other investments, real estate is dramatically affected by the condition of the neighborhood where the property is located. With the exception of a global recession, real estate is affected primarily by local factors.

• Real Estate Investment & Services

• Real Estate Holding & Development
• Real Estate Services

• Real Estate Investment Trusts (REITs)

  REITs is a security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages.

• Industrial & Office
• Retail
• Residential
• Diversified
• Specialty
• Mortgage
• Hotel & Lodging

Most basic materials industries share a common problem: low profitability. In steel, pulp and paper, glass, and commodity chemicals, to name a few, periods of high profits alternate with heavy losses, yielding average returns that may not even cover the cost of capital.

Many accept this rollercoaster ride as inevitable; such, they say, is the nature of cyclical industries. But the truth is, poor management makes the ride rougher.

Basic Resources

• Forestry & Paper
• Industrial Metals & Mining

• Aluminum
• Nonferrous Metals
• Iron & Steel

Chemicals

Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or non-durable.

Durable goods (e.g. autos, furniture, and appliances) have a significant life span, often defined as three years or more, and consumption is spread over this span.