Knowing the hot trends is critical to earning big gains in the markets. Here are five you need to know…
Catching significant trends is every investor's goal. If you were fortunate enough to find any of the monster trends over the last decade; you know the money-making power of a massive, sustained market move. Millionaires are minted by understanding market/economic trends.
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One of the keys to riding the big waves is understanding the zeitgeist of the age. Every year has a slightly different twist on the overall decades-long economic themes. Themes like geopolitical tensions, the aging population, technological innovations, and the internet are examples of the major themes of the 21st century. Multiple sub-themes and unique trends pop up on a consistent basis. Knowing these sub-themes and unique trends are crucial to earning big gains in the financial markets.
I like taking a close look at the new trends at the start of each year. Doing this is a great way to begin finding new opportunities!
This article will reveal the five crucial trends you need to know for 2019. The listed trends are in no particular order, but each one has the genuine potential to make fortunes for investors!
2019 is poised to become the year of IPOs. In fact, 2019 is slated to be the biggest year for IPOs since the turn of the century. Huge valuations and monster IPO capital raises are pending this year. Behemoths like Uber with a $72 billion estimate, Lyft at $15 billion, Slack at $10 billion, and even the potential of Airbnb with $31 billion are leading the IPO trend.
The move away from private capital into the public markets is thanks to the attractive valuations and performance of recent listings. Forty-six tech and communication firms went public on the Nasdaq in 2018 with a weighted average gain of 18% since their IPOs.
Of course, if you can be allocated shares in an IPO that is ideal. While not all IPOs explode higher, it's a time-proven way to makes serious money in the market. Unfortunately, IPO allocations often are only available to brokers wealthiest and most active clients.
One way to profit from the increase in IPOs without investing directly into them is by buying the large investment banks issuing the IPOs. Goldman Sachs (NYSE: GS) comes to mind as a prime candidate.
2. The Cloud
The Cloud is slated to grow to a $411 billion market in 2019. Gartner's latest global survey shows that Infrastructure as a Service (IaaS), a form of cloud computing, is growing at an over 23% compound annual growth rate. While the Software as a Service (SaaS) cloud segment is forecasted to grow to nearly $100 billion in 2019. Leading names in the cloud sector include Microsoft (Nasdaq: MSFT), whose Azure platform is rapidly gaining traction, Amazon (Nasdaq: AMZN), and Alphabet (Nasdaq: GOOGL).
3. Russian E-Commerce
A soon to be leading sub-trend in a trillion dollar sector, Russian-based e-commerce is poised to explode in 2019. Russian e-commerce players plan on investing over $1 billion in infrastructure this year. The market is forecasted to grow to over $50 billion by 2023 from a mere $19 billion last year.
What I love about this market at this time is the current fragmentation and distinct absence of the giant Amazon.
My favorite way to play this market is via the Emerging Markets Internet and E-commerce ETF (NYSE: EMQQ).
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While the market may be saturated with legal weed, one sub-trend of the cannabis business has me excited for 2019. The sub-trend is the burgeoning growth in cannabis-laced drinks. Big players are jumping on board. Examples include Constellation Brands investing in Canopy Growth Corporation and Molson Coors Brewing joint venturing with Hexo Corp for nonalcoholic cannabis loaded drinks.
The cannabis drink market is poised to gain substantial traction in 2019. Now is the time to take a very close look!
5. The Real Estate Bear
The high end of residential real estate has started to feel the pain from rising interest rates. Like a canary in a coal mine, the upper end can signal the start of pain across the housing markets. Los Angeles, Denver, and Seattle have seen falling demand. At the same time, sales of homes in Southern California have fallen 18% and in San Francisco sales have plunged to the lowest level since the financial crisis of 2007.
Mortgage interest rates are expected to climb to 5.5% in 2019 which will increase the cost of ownership significantly. While I don't expect a 2007-style real estate meltdown, there is little doubt the long-term top is in place for most residential markets. No one really knows how fast things will deteriorate, so be prepared. I fully expect 2019 to go down in history as a pivotal year when the real estate bull ends. Avoid paying retail for residential real estate in 2019!
Risks To Consider: No one knows the future and any or all of the above trends for 2019 may fizzle out. Always use stops, diversify, and position size intelligently when investing.
Action To Take: Watch the above five trends for 2019 and look for ways to profit!