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What Is a Transportation Sector?

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  • Written By: Luke Arthur
  • Edited By: C. Wilborn
  • Last Modified Date: 15 July 2014
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The transportation sector is a portion of the economy that deals with transportation-related businesses. Many investors like to put money into the transportation sector by purchasing stock from companies within those industries. This sector is needed at all times in order to deliver goods and passengers to other areas. Even though it is considered to be a necessity, its success is inversely affected by oil prices in most cases.

There are many sectors that make up the economy as a whole. Different sectors often work together in order to provide goods and services to the general public. In addition to the transportation sector, some other sectors that make up the economy are the utilities sector, the technology sector, the financial sector, the energy sector, and the healthcare sector.

The transportation sector consists of several different types of businesses that transport people and things to other locations. One of the most classic examples of a business in the transportation sector is a commercial airline. Airline are in the business of transporting passengers from one part of the world to another. Another example of a business in the transportation sector is a railroad. Railroads generally transport products across the country, but they also transport some passengers.

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Many investors like to get involved in this sector because it is considered to be a necessity for many other industries. Investors can choose from a variety of investment options that allow them to profit from transportation businesses. For example, investors could purchase stocks of the individual companies in the industry. They could also choose to invest in mutual funds and exchange-traded funds that focus on transportation sector industries. Investors could even purchase corporate bonds that are issued by transportation companies for another investment option.

This sector always tends to be profitable because it is required by so many aspects of the economy. Transportation businesses are needed in order to transport consumer goods from manufacturers to the wholesalers and retailers. Without this industry, consumers would not have access to the food and other goods that they need.

Although this industry is generally always profitable to a certain extent for investors, its profitability is inversely related to the price of oil. If the price of oil increases, the profitability of this sector tends to decrease. When oil prices go down, this sector tends to do better and make more profit.

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