What is Bellwether stock?
The term Bellwether is most used in the stock market, therefore, the bellwether stock is a company seen at the forefront of the overall economy, a particular sector, or industry.
The Bellwether stock may also be called a thermometer of the market, and the market can take a cue from these stocks to record economic strength or weakness.
It is not necessary the stocks belonging to a particular sector can only be qualified as a bellwether, rather, the bellwether stock may belong to any sector or the industry, better known as Blue-chip companies, the growth for investors may come in the form of stock growth, dividends or maybe both, that drive the mileage for the investors. Their popularity keeps them floating on the customer loyalty metrics. Let’s see some of the example(s) of the bellwether stock
Apple – The world’s top smartphone, tablets, accessories, and wearable accessories. Is considered to be a bellwether stock in the Tech sector. Its journey and early reputation of trendsetters such as iPhone and wristwatch linked with fitness have now become part and parcel of our lives. If the company continues to dominate the market and remains relevant for the consumers, then the stock will continue to report growth in the year of the come and significantly impact the overall tech sector growth. On the contrary if, market share decline or products does not resonate with the ever-changing customer needs the growth may become sluggish.