The Best Cybersecurity ETF to Buy Right Now
- In 2018, hackers exposed 2.8 billion user records, causing billions of dollars in damage.
- This $124 billion sector is getting a boost from rising digital crime.
- And there’s one easy way to profit from this in the next year.
If you want to make really big money in the stock market, look for the really big trends.
I’ve been writing about it for two years now, but cybersecurity is one sector where the investing opportunities just keep unfolding, year after year.
There’s a good reason for that: digital crime.
According to a recent tech study, 2018 was another banner year for hackers. They exposed more than 2.8 billion user records, causing billions of dollars in damage.
Among their targets last year, hackers aimed their exploits at hospitals and other health care institutions nearly half the time (48%), with banking (11.4%) and government (8.5%) computer systems coming in at a distant second and third place.
As a result, corporate and business victims upgraded their security spending in an attempt to be better prepared. Other businesses and institutions read about the hacks and decided they needed to spend more on cybersecurity countermeasures as well.
But hackers change their game on a regular basis too.
The point is, it’s an arms race as each side responds to the other’s tactics and vulnerabilities. Researchers at Gartner estimate that spending on cybersecurity will rise nearly 9% this year to $124 billion. By comparison, global companies will likely boost their general infotech budgets by just 3.2%.
To learn more about cybersecurity, click on the image below and watch my video.
That’s also why I’m seeing stocks I’ve recommended to my subscribers in Total Wealth Insider earn triple-digit gains. One cybersecurity position we hold is up over 20% in just a handful of months.
But there are plenty of exchange-traded funds (ETFs) to play this trend.
A good one is ETFMG Prime Cyber Security ETF (NYSE: HACK). Since 2018, the shares have outpaced even the Nasdaq by a wide margin:
I expect HACK’s outperformance to continue. It could rise another 10% to 15% over the next year as the cybersecurity arms race shifts to new battlegrounds.
For instance, researchers at Forrester expect utilities and telecom firms to be the biggest global spenders on cybersecurity products and services this year.
That shouldn’t be surprising, given the growing number of attacks on so-called critical infrastructure firms. These are sometimes masterminded by hackers probing for weaknesses at the behest of various military and intelligence agencies, or by hackers working alone to expose personal records and data for profit.
It’s unsettling to read. But it’s unfortunately part of the chaotic world we live in.
It also creates investment opportunities as spending and sales growth far outpace the meager 2% to 3% growth of the economy itself.
I’ll be alerting my Total Wealth Insider readers to the best of these opportunities as we continue locking in gains on this next wave of security spending.
Best of good buys,
Jeff L. Yastine
Editor, Total Wealth Insider