It’s Friday morning, and I have fallen in love once again.
Actually several times to be honest.
And that’s before the sun has even come up.
Let me explain. I recently appeared as a guest on TD Ameritrade Network’s Watch List TV show. Since the markets have been in turmoil of late, host Nicole Petallides asked if I was still “loving tech.”
I got right to the point and said I love tech every morning I get out of bed.
Of course that makes a lot of sense when you consider my mantra is “the road to wealth is paved with tech.”
But many analysts out there have not shared my enthusiasm of late. Just weeks ago, all you heard from the media and Wall Street is that tech was going to lose steam.
As the second quarter earnings season comes to a close, it bears noting that a wide range of tech leaders easily beat Wall Street’s forecasts.
Now then, this was my second time to appear as a guest on Petallides’ show. Then as now, I told her tech would not just lead the market higher but help drive the entire U.S. economy.
I did mention several specific tech names that hare doing great. We’re talking everyone from Texas Instruments Inc. (NasdaqGS:TXN) in chips to Facebook Inc. (NasdaqGS:FB) in social media to Roku Inc. (NasdaqGS:ROKU), an online streaming upstart that now has 30 million active users.
Tech is a target rich environment because we’re in the midst of what I call the convergence economy. Never before in history have we had so many disruptive breakthroughs all occurring at the same time.
Indeed, cloud computing, artificial intelligence, e-commerce, the mobile wave, virtual reality, the connected car, fintech, and much, much more are all working together to make the U.S a very tech-centric economy.
We’re talking trillions of upside ahead. For instance, I conservatively estimate fintech could fuel $7 trillion in payments a year in less than a decade. That’s just 10% of the $70 trillion in global GDP.
I say the forecast is conservative because the foreign exchange markets alone conduct roughly $5.1 trillion – not in a year or a month, mind you, but in a day.
Take a look at e-commerce, which uses the Web, computers, handhelds, servers and software. Analysts at eMarketer say forecast online sales to hit $4 trillion by 2020.
These two sectors alone present us with a host of plays. However, few retail investors have the time – and patience – to sift through so many potential options and separate the market crushers from the losers.
That’s what I do every month for members of my low-cost newsletter the Nova-X Report. You can subscribe by clicking here.
But if you’re not quite ready yet for a paid service, I have a great alternative for you.
It’s the iShares North American Tech ETF (NYSEArca:IGM) ETF. Holding roughly 290 stocks, this exchange-traded-fund covers the waterfront.
We’re talking everything from satellite communications, the IoT, cloud computing, e-commerce, chips, robotics, AI and 3D printing.
As you might expect, this robust ETF owns some of the leading names in tech today that have helped the stock market bring investors historic gains in the historic 10year bull market.
- Xilinx Inc. (NasdaqGS:XLNX) ranks as one of the most advanced chip designers in the world. It makes field programmable gate array (FPGA) logic chips. They’re seeing heavy action in a range of industries that need chips that can handle complex calculations. As the term FPGA implies, these integrated circuits can be tweaked out in the field to meet a client’s very specific needs.
- RealPage Inc. (NasdaqGS:RP) provides on-demand software for rental property managers and owners. It’s a great play on the global real-estate market. The Texas-based firm serves more than 12,400 clients worldwide from offices in the U.S., Europe and Asia. Talk about scale – it helps mange rental properties with more than 30 million residents with a platform that processes more than 600 billion transactions yearly.
- ServiceNow Inc. (NYSE:NOW) is making a fortune by allowing client to outsource their IT services. More than 800 members of the Forbes Global 2000 list use ServiceNow products. A decade ago, the market for IT services delivered via cloud platforms barely existed. But last year, total global sales for this sector are projected to hit $127 billion. CEO John Donahoe formerly ran both eBAY Inc. (NasdaqGS:EBAY) and PayPal Holdings Inc. (NasdaqGS:PYPL).
- Adobe Systems Inc. (NasdaqGS:ADBE) has made one of the more stunning movements from desktop publishing to cloud sales. Its Creative Cloud platform now offers far more than just Illustrator for creating, editing and managing graphics and Photoshop for managing and editing pictures. The firm says its total addressable market will be $80 billion at the end of 2020. Not bad for a firm that only got involved in digital content back in 2009.
A Smoking Hot Fund
Yes, American tech leaders dominate this ETF. And that’s a good thing because the U.S. is running on full throttle in large part because it’s the epicenter of the convergence economy.
And this is a very cost-effective ETF. IGM has a cost-ratio of just 0.48% and trades at roughly $215.
Make no mistake. This is a market crusher.
Since the market rebounded last Dec. 24, IGM is up 34%. That means it beat the S&P 500 by 54.5% over the period.
The five-year comparison is off the charts. The overall market is up a respectable 43%.
But our hot little ETF just put that to shame, rising nearly 115%. That means it beat the S&P by 167%.
Now you know why I like to remind folks to invest for the long haul.
With a fund like this, you can always buy more on the dips and make your long-term profits even better.
That’s why I think this is a solid base for a great, high-earning tech portfolio. that will help get you to financial freedom.
Cheers and good investing,
Michael A. Robinson