Long-term investing requires discipline—and knowing what to skip matters just as much as knowing what to buy.

When building a portfolio that compounds over years, certain sectors consistently underperform on risk-adjusted returns. Here's what seasoned investors often caution against:

**Cyclical sectors during peak valuations** — Industries tied to economic cycles (like construction, automotive, retail) tend to crater during downturns. Holding through these periods erodes gains faster than you'd expect.

**Commoditized businesses with thin margins** — If an industry faces constant price compression and intense competition, your returns get squeezed. Margins matter more than revenue growth.

**Sectors dependent on government subsidies** — When policy shifts, funding dries up fast. These plays carry hidden political risk that most investors underestimate.

**Industries with disruption risk** — Established players in vulnerable sectors face existential threats. The next wave of innovation could render them obsolete.

**The golden rule**: Stick to sectors with pricing power, durable competitive advantages, and secular tailwinds. These tend to compound wealth quietly over a decade-plus horizon. Skip the noise of temporary rallies in struggling industries—your future self will thank you.