Searching for profitable industries to invest in can be a solid strategy when looking for new opportunities. At the same time, however, putting money out there invested on the backs of new, hot stocks isn’t always a great plan. Instead, taking a longer-term, patient and steady approach to researching industries, sectors and means of investment is the better move. Although predicting future return on investment is fraught with issues, there are definitely areas where one can discern probable continual growth.
Thus, take a look at these top investments to make for 2019.
ETFs, or exchange-traded funds, have witnessed a boom in popularity over the last several years. As TD Ameritrade aptly describes, an ETF is a basket of securities that trade intraday like individual stocks on an exchange, and are typically designed to track an underlying index. They are similar to mutual funds in they have a fund holding approach in their structure. That means they have numerous holdings, sort of like a mini-portfolio. Each ETF is usually focused on a specific sector, asset class, or category. And certain sector ETFs are primed for future growth that even investing beginners can cash in on.
Utilities ETFs, in particular, show great promise, such as Utilities Select Sector SPDR ETF (XLU). While its price might be down year-over-year 2017 to 2018, more significant is the steady and sustained growth since 2009. XLU’s top holdings are in companies such as NextEra Energy, Duke Energy, Dominion Energy, among many others, covering both conventional sources of energy — electricity and natural gas, for instance — and renewable sources of energy; NextEra is in fact the world’s No. 1 renewable energy installer, according to Clear Technica.
Many REITs, like UDR, Inc. have been benefiting from recent housing trends. The percentage and number of renters has been steadily increasing in the wake of the housing crash and recovery. UDR owns nearly 50,000 apartments, has been around for 46 years and has paid dividends for 33 of those. Its funds from operations — FFO, the REIT equivalent of earnings per share — is excellent.
UDR’s strategy is straightforward yet brilliant at the same time. Build or buy in popular neighborhoods where companies are either starved or have an unquenchable need for workers, and housing is difficult: Cities like San Francisco, Boston, Los Angeles, Seattle and Washington, D.C.
UDR’s share price has been on a steady rise for the last three years, after a large jump from 2013 to 2015, according to Yahoo Finance. With homeownership rates down in many booming cities, REITs stand to benefit immensely from the increase in renters over the coming year.
Elderly Care Industry
The elder care industry is surging and not because of a speculative bubble. The world is getting older, with the number of people 60 and older expecting to rise to 2 billion by 2050 — approximately 22 percent of the global population, according to the World Health Organization. With the global senior population increasing, new and more investment opportunities in companies that target this age group emerge.
Critical areas for growth can especially be found in retirement living and home healthcare industries. The Bureau of Labor Statistics expects the demand for home health aides and personal care workers to rise by 47 percent and 39 percent, respectively, over the next ten years. This leads to a further point: Healthcare is one of, if not the, largest expenses for seniors and, as a corollary, the world economy at large. According to the Organization for Economic Cooperation and Development, healthcare spending among its 35 constituent countries could increase to 14% of GDP by 2060.
Thus, dealing in the health sector of elder care specifically, look for diversified pharmaceutical and consumer stocks, such as Johnson & Johnson, Merck, Pfizer and United Health Group. Beyond healthcare, elderly care and its ancillary industries offer a broad range of investment opportunities you can take advantage of in 2019.