Industry in Focus:

 INDUSTRY BRIEF: Conglomerates are companies with multiple, unrelated business units operating in markets that differ in type as well as geography. This diversification can provide some insulation against cyclical swings in regional economies or industry-specific booms and busts. 

Most conglomerates have taken a big hit in the past year. Bellwether stock General Electric is down 33%. The U.S. economic slowdown is weighing on companies that depend heavily on this region for business, particularly those with involvement in the financial industry. A few conglomerates such as UTX, though, are faring better thanks to continued strength in defense spending while others like Danaher are more than compensating with strength across businesses like medical equipment and industrial tools.  Conglomerates are also sustaining earnings with growth in foreign markets such as China, India, and Brazil, but the recent rebound in the dollar threatens to diminish the value of those foreign profits near-term.

 Bottom Line: The diversification that comes with conglomerates can limit their stock performance in boom times, they're not the most exciting companies you'll find. Nonetheless, these stocks can anchor a portfolio through a storm and provide dependability for investors.  Stability is the norm with conglomerates, so don't expect exceptional growth.

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