The transportation sector covers companies that transport products, goods, and people across the globe. It includes airline companies, railroads, and trucking firms. The industry is cyclical and can see big declines during recessions. However, it is often a stable addition to a portfolio and can be an excellent source of investment growth.
Consulting
The transportation industry is responsible for moving people, animals, and goods from one place to another. Consultants who work in this sector provide services such as advising businesses on their health and providing financial oversight.
Consulting services offer an opportunity to help companies streamline their operations and increase productivity and revenue. They can also help companies build new business capabilities.
A consultant’s main objective is to provide expertise, advice, and analysis to help improve business performance. They do this by assessing the current state of an organization and providing recommendations that will help the company grow.
To achieve this, they must establish goals that are specific, measurable, achievable, relevant, and time-oriented (SMART). They must also assess the results of their work, including intangibles like improved morale and strong implementation of business values.
Investment
Investing in the transportation industry can be a rewarding and lucrative way to build a portfolio. The industry transports raw materials, manufactured products, and travelers from one place to another, and it’s an essential part of the American economy.
It also has a lot of room for growth. Currently, the transportation industry is in the midst of a major technological shift that’s changing the way we get around.
Companies specializing in delivering products and services to consumers can be good investment candidates, as can those involved in infrastructure construction or repair. However, keep in mind that transportation stocks are cyclical and don’t do well during periods of recession or anemic economic growth.
The best way to invest in the transportation industry is through an exchange-traded fund (ETF) or a mutual fund. ETFs are a safer option for long-term investment growth and can be more liquid than stock investments, but they usually produce lower returns.
ETFs
The transportation industry is vital to the economy. It encompasses air travel, ground freight, logistics, marine travel, railroads, trucking, bridges, and auto parts.
But transportation stocks can also be cyclical, so investing in transportation ETFs is a smart way to get exposure to this vital industry without the risk of picking individual companies. There are a few options, all of which offer low costs and instant diversification.
One popular option is the iShares Transportation Average ETF (NYSEMKT: IYT), which provides broad exposure to U.S. transportation stocks via a cap-weighted index that allocates about 76% of its weight to railroad operators, air freight and logistics firms, and trucking companies.
Another transportation ETF that provides a more targeted approach is the SPDR S&P Transportation ETF (NYSEMKT: XTN), which invests in airline, air freight, trucking, railroad, and marine ports and services companies. It is a capitalization-weighted ETF and uses growth, value, and volatility metrics to score stocks within its portfolio.
Mutual Funds
There are many ways to invest in the transportation industry, including shares of individual companies and exchange-traded funds (ETFs). But a mutual fund is one of the most popular investment vehicles.
There’s a reason why: They provide convenience, liquidity, and a wide range of investment opportunities. They are also widely recognized as one of the most effective ways to reduce risk and manage your portfolio’s diversification.
But before you can start investing, you need to choose the right investment vehicle for the right investment opportunity. You want to choose a mutual fund that matches your risk tolerance, time frame, and objectives.
Transport companies are cyclical stocks that tend to do well when economic conditions are strong but not so much during recessions. That means they’re a good choice for investors who expect an expanding economy and demand for goods.