Which Industries Should You Be Investing In?
Any investor will tell you that if you get it right when you invest in a business, this provides you with a fantastic opportunity to make money. That’s why many people are constantly looking for ways to invest in new industries. But these investors will also tell you that it isn’t always as easy as […]
Any investor will tell you that if you get it right when you invest in a business, this provides you with a fantastic opportunity to make money. That’s why many people are constantly looking for ways to invest in new industries.
But these investors will also tell you that it isn’t always as easy as it sounds. Instead, it takes a lot of hard work and dedication to find the right industry and investment, doing all of the necessary research beforehand.
These careful, well-thought-out (but altogether bold) approaches are what have led to some of the greatest investments of all time. And no one is perhaps more successful than Warren Buffet, who’s successfully invested in a range of companies over the years including PetroChina (where he got a 720% return), Freddie Mac (where he got a 1,525% return) and Berkshire Hathaway (where he got a whopping return of 1,745,300%)!
One of the best ways to secure lucrative investments like this is to look at which industries have the biggest potential for growth over a long-term basis. Once you’ve found this, you can get great exposure to these industries by purchasing what’s known as sector funds.
So if you fancy competing with Warren Buffet by making your own investment in an industry (or two) of your choice, here are some industries you might want to consider:
The Technology Industry
It goes without saying that technology is at the heart of many of the changes we’re witnessing today, and this looks set to continue for the next few decades – at least.
Within this sector you’ll find a variety of stocks that contain various technology businesses, including those who are providing business data processing and information technology, technological service industry companies and manufacturers producing electronics, computer software or computer hardware.
Examples of technology giants include Google, Microsoft, Apple and Facebook – but with more and more innovations being released every day, you’re sure to find some more accessible tech companies that are less known, too.
The Gambling Industry
Throughout 2017, the gambling industry continued to go from strength to strength. Online gaming sites are thriving due to the on-the-go gaming and plethora of games available. There is a huge range of slot games and every niche imaginable is covered, leaving no one disappointed.
This continued boom in the gambling industry is largely down to technology and the exponential rate at which it’s evolving. This is allowing gambling sites to appeal to far more people, while allowing customers to gain access to their sites anywhere in the world (gambling laws permitting). And with in-play betting constantly on the rise, this brings a fluidity to online gambling that isn’t restricted to sports. Bookmakers are becoming more open to taking bets on a range of markets, including how many hot dogs will be eaten in the hot dog eating contest on Coney Island.
Another area that’s seeing great growth is daily fantasy sports, particularly in America. It’s estimated that, by 2020, this area may be worth in excess of $5 billion.
And that’s without even mentioning the scope that’s available for group bets on social network sites.
With huge advances in biotechnology and an ever-aging population, the health industry is going to be in huge demand over the coming years. What’s more, this industry is quite broad, which gives you great scope.
Even if you don’t have any investing experience, you can look at specific areas that may appeal, including medical instrument makers, biomedical companies, drug manufacturers, insurance companies, institutional services and hospital conglomerates.
Furthermore, when certain industries aren’t thriving because of negative economies, the healthcare industry will continue to do quite well because people are always going to need to buy medication and see a doctor, regardless of what’s going on in the world.
That’s why this sector is often considered ‘defensive’.
This sector consists primarily of brokerage firms, insurance companies, credit card companies and banks. And just like the health industry, it should benefit from the baby boom generation.
Because they’re expected to receive history’s largest transfer of wealth when their parents decease and pass on what they’ve saved. Insurance companies, brokerage firms and banks can all benefit from this.
Before you think about investing in a particular sector, you should be careful because there’s always the added risk that volatility could cause a downturn. For example, if you over expose yourself in one sector, this could have a detrimental impact on your portfolio if this particular industry isn’t performing well.
Therefore, it’s always a good idea to try and establish a diversified portfolio, approaching numerous industries that appeal to you. In doing this, you aren’t placing all your bets on one horse, rather you’re spreading your bets across a select few horses. You’re spreading your risks – which is a savvy move for investors.