I’ve found you can work on your swim stroke all day long … but if you’re swimming against the tide, you’re not getting anywhere fast.
That’s why it makes the most sense for investors to buy stocks with huge mega trends fueling their growth.
These are industries with huge tailwinds propelling them forward … and that return big-time profits to investors over the long run.
I’ve identified one such mega trend that’s developing in the tech market. In fact, according to Statista, this $9.5 billion industry is set to grow 13 times over due to several huge tailwinds!
Mark my words: In the next five years, this one mega trend alone could become a nearly $120 billion industry.
And in today’s video, I tell you the best way to profit from it … without taking big risks with your hard-earned money.
I also give you one sector to avoid in 2020 — a dead-money industry packed with investors swimming against the tide.
Check it out in the video below…
Why Mega Trends Are So Important to Investors
If you know how to spot a mega trend and how to get behind it, you can make easy money over long periods of time.
When you’re making an investment, I find, one of the key things to ask is: does the business I’m investing in have a tailwind or does it have a headwind?
Tailwinds: A tailwind pushes a business forward. Mega trends are tailwinds.
For example, digital marketing, digital advertising, less and less money is going into print advertising and more and more into digital. 10-15 years ago, if you wanted to advertise, you advertised in the yellow pages and you placed an ad there and every single month they hit your credit card and they charged you money and it was easy money because anyone who opened up the yellow pages would see your ad, in local newspapers and such.
But today, more business is choosing digital marketing. I don’t think we even have a copy of the Yellow Pages in my house. In 2017, digital marketing was a $90 billion business. In 2023, it’s projected to be at $150 billion. That’s a business that has a great tailwind because it’s just going to keep expanding.
Headwinds: A business in a headwind is difficult to even just try to speculate where they’re going to be and is really a tough game.
For example, department stores or mall-based retailers are suffering major disruption from Amazon and all online commerce. They’re facing weakening demand from fewer people visiting malls. And, overall, fewer people have a need to go to a department store. I don’t care how good management is, it’s hard to make money in a business with a headwind. It’s much easier to make money in a business with a tailwind and you don’t really need that many things to go right, because the force of the tailwind or the mega trend just pushes the business forward.
And that’s why Warren Buffett, the greatest investor of all time said: “To swim a fast hundred meters, it’s better to swim with the tide than to work on your stroke.” [1]
Find a mega trend and just sail that over long periods of time to make good money.
THE Mega Trend to Watch in 2020 & Beyond
Let’s talk mega trends for 2020. The mega trend with the best tail wind, an industry I see growing in 2020 and beyond is Artificial Intelligence (AI). Now, Artificial Intelligence is not as complicated as it sounds. To put it plainly, AI refers to computer programs, capable of performing tasks without human effort.
That includes programming, machine learning, natural language processing, robotic automation and more. AI is really touching us every single day, right now, whether we know it or not. Artificial Intelligence is making businesses more efficient, making businesses more money and helping out the consumer.
Here’s one example: health insurers.
Health insurers are having members use an app with their daily checklist of meds, diet and exercise. [2]
These apps are equipped with machine learning and will sort through enormous amounts of data from all the members. The health insurer can use this data to identify the at risk patients way in advance of them going to a doctor or needing medical attention.
These AI driven medical apps will tell health insurers what action to take. This could be huge for health insurance companies because they can avoid hospital stays, which costs them oodles of money and it’ll help their members stay healthier.
AI could be a giant leap into real preventative medicine.
Artificial Intelligence, has a huge tailwind. It’s in a mega trend, which isn’t going to be measured in terms of years, but in terms of decades.
In 2018, revenue from Artificial Intelligence software was around $9.5 Billion. It’s projected to reach $125 billion by 2025. That is 13x growth.
We’re still in the early innings with AI, especially with machine learning software and the chips needed to increase the processing speed needed to collect, correlate and understand this data. This sector is going to be great investments over the long term.
Now, if you don’t know which companies specifically to invest in, a low cost ETF such as Vanguard Information Technology (NYSE:VGT) is a good choice.
AI is my pick as one of the best mega trends to watch for in 2020. It’s an industry that has a huge tailwind behind it and it’s just going to do unbelievably well over time.
Avoid this Mega Trend in 2020
This mega trend is facing over optimism and strong headwinds is the cannabis industry.
Some may be surprised to hear me say that. Let me tell you why I think investors should avoid the cannabis sector in 2020 and over the next few years.
First of all, there are still regulatory challenges. Marijuana is still illegal in the United States under federal law.
Now, that creates a huge problem because States might legalize it, but nobody wants to get in trouble with the Feds.
Cannabis related businesses can’t open a bank account and can’t use credit cards. It’s a cash only business. And, more importantly, cannabis companies aren’t making money.
The five companies that dominate the marijuana industry have a total market capitalization of around $20 billion. That’s not a lot.
The industry is plagued by oversupply. Demand and tax revenue have been down which is giving a lot of States pause. In fact, California is rewriting their budget and readjusting for lower tax revenue.
It’s hard to beat drug dealers who don’t have regulations and so many other barriers to entry. And that’s what we’re seeing happen.
For example, the Alternative Harvest ETF, (NYSE:MJ) hit a peak in March of 2019. Now it’s down more than 54% already, it’s valuation cut in half.
This is a tough, tough, tough trend to ride.
Yes, the cannabis industry is a $160 billion market, but only 20% of that is even legal. It’s a tough industry to guess which is why I put cannabis in my “too hard” pile.
I have no idea where the cannabis industry is going to be in five years. It’s not like Artificial Intelligence, that’s for sure.
There are easier ways to make money investing.
Final Thoughts On Mega Trends in 2020
Invest in the Artificial Intelligence mega trend.
Avoid the cannabis mega trend.
This article covers my thoughts on mega trends in 2020 just briefly. For those who are interested, there is more, so much more, that I offer my subscribers. I provide model portfolios, trade alerts and in-depth investing advice and market insights in my newsletter called Alpha Investor Report.
It’s more than a newsletter, it’s a window into the personal investment portfolio of a Wall Street pro.
I analyze one company that’s in a growing industry that has a huge mega trend behind it. It has strong tailwinds, run by an excellent CEO and it’s trading at a bargain price. If you don’t know which stock to buy, this would be an excellent source. If you sign up I also have a special report on the Artificial Intelligence companies that I like that will ride this huge mega trend.
AI’s Future Lies With Just 1 Stock
Everyone and their mother is jumping into the artificial intelligence (AI) mega trend.
Companies realize that they can get investors’ attention by claiming to be part of the AI movement … but few often are.
And even fewer stocks today actually lead the AI pack.
But what Wall Street doesn’t want you to know is how this entire industry is practically built off of one company’s technology — one stock you could buy today.
My Alpha Investor Report research service takes a deep dive into the one company that I believe to be leading the AI revolution.
Now, I’m giving you the chance to learn more about it.
But, a word of caution: While this stock currently trades for a bargain price … I have reason to believe that it won’t for much longer.
So, don’t delay.
To find out how this one company is dominating the AI market — and how you could profit from it — click here now.
Regards,
Editor, Alpha Investor Report
P.S. Check out my YouTube channel and click on the subscribe button. That way, you won’t miss any of the content I post on how to make money in the stock market and how to be a better investor.
Sources:
[1]: InvestED: Ep. 216 – Warren Buffett Quotes
[2]: Consumer Reports – From Pill Organizers to Apps, How to Manage Your Meds
