Ripest Sectors to Invest in 2019: If You Want Long-Term Returns
If you want to beat the market in the long run, invest in a sector that can grow faster than the general economy in the long term. These are among the top industries to allocate more of your portfolio. And remain confident that they can be leaders of tomorrow.
Information Technology (IT)
Undoubtedly, technology is the driving force behind innovation, as well, it’s at the core of the digital age. And this will continue for years. Daily, people witness a new list of technologies. For instance, artificial intelligence, crypto technology, and a lot more.
Lately, the IT sector has been growing exponentially and is showing no signs of a downswing. Although it requires some knowledge of the internet, and the like, IT seems to be one of the most benefiting sectors to invest in for 2019. Arguably, there is no industry in the modern economy that technology doesn’t touch.
Technology is also known for its ardent competition and fast obsolescence cycles. Meaning, losers or winners don’t maintain those positions forever. Besides, the dynamism and remarkable growth make IT a must-consider sector for all equity investors.
Consumer Discretionary
Due to the need of high consumer confidence, it seems like nothing will stop this sector from rising in 2019; especially if wage-growth continues to kick in. Nevertheless, you need to be selective of the companies you choose, since several retailers are addicted to giant online retailers such as Amazon.
Investing in physical retail can be a futile investment, considering dropshipping, and other online businesses are eating away the few remaining bags in the offline retail stores. In light of this, look at companies that are growing around the challenges associated with the large online retailers—the ones coming up with solutions that attract customers to purchase from their stores.
Telecommunications
Telecommunications is a crucial tool for companies. It enables businesses to converse with their customers effectively, and improve their services or products.
The G20 Summit in Buenos Aires consider infrastructure among its top 3 priorities. With the slow but steady adoption of the 5G technology, the infrastructure investment in mobile data transmission starting 2020 is expected to reach far higher volumes in the next few years.
Already, China and the US look as if they are competing to build superfast networks. Regarding these investments, it’s expected that data centers, for security reasons, will be localized.
As an investor, you should look at companies that are well-positioned, conservatively managed, and with lower debts.
NASDAQ 100 Index Fund
Do you want to invest in some of the best and biggest tech giants but can’t pick the winners? Well, NASDAQ 100 is an ideal choice that will help you with that. More so, you won’t need to know the losers or over-analyze a list of particular companies. Note that, this fund is based on the NASDAQ’s 100 biggest firms, implying they’re among the most stable and successful.
Overall, the ideal NASDAQ index funds charge quite low expense ratio; thus, they offer a cheap way to own the entire companies in the index. Besides, a NASDAQ 100 index fund provides you instant diversification. For this reason, your entire portfolio won’t be exposed due to failure of a single company.
Health Care Sector Funds
Although conventionally seen as a “defensive sector,” health care also profits from higher earnings. Health care was one of the best performing sectors in 2018, and can comfortably rise in 2019. Moreover, over the past 10 years, health care has been hitting it big.
With the rapid advancement in biotechnology and a growing population of seniors, the health sector will continue to rise in the years ahead. Keep in mind that the health industry is quite extensive. Meaning, no matter your experience in the health industry, there’s a specific area for you to invest in. To name a few, institution services, hospital conglomerates, drug manufacturers, biomedical companies, and insurance companies.
Remember that, while several industries can be performing poorly due to adverse economic conditions, the health sector can still thrive. Because, people still need medical attention, and drugs, no matter how good or bad the economy is doing.
Financials
Primarily, this sector consists of banks, insurance companies, brokerage companies, and insurance companies. Like the health sector, the financials are benefiting from the baby boom generation. To mention, recently there’s been an increase in the number of children inheriting large amounts of wealth from their parents. And the named firms stand to benefit the most.
Investing is a thoughtful way to increase your wealth over time, and you have a wide range of investment options. Even so, think past the quick-paced ups and downs of each sector. To point out, diversifying your core holdings is a good portfolio strategy when investing in sector funds. All said, investing can be surprisingly affordable—you can invest even if your pockets aren’t deep.
