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This Play Can Capture the Growth Power of Tech, Even in A Choppy Market

0 | By Michael A. Robinson

Right now, the market can be a scary place, as choppy as it is. Just look at what happened earlier this week. Since February 24, the broader market is down by more than 2.5%.

The thing is, I’m here to tell you that these movements might seem troubling, the overall trend still holds true, the road to wealth is still paved with tech.

If you zoom out and have a look at the past year overall, the broader market is up by almost 30%.

And that’s in spite of the hit that the market took last march when the beginnings of the coronavirus pandemic caused sharp selloffs.

Because regardless of the turns the market might take because of any one day’s headlines, the point remains, that the innovation of the high-tech sector making new things possible is what adds wealth to the economy.

The tech sector will continue to be the economy’s wealth engine even if the market is choppy for a while,

That’s why, today, I want to show a broad way to play all this tech with an investment that is beating the broad market by more than 61%…

The Top of The Ladder

In a way, the incredible growth power of the modern high-tech sector of the economy goes back 75 years, to the unveiling of a radical new machine on February 15, 1946.

And make no mistake, the formal debut of ENIAC was a massive breakthrough. It was the first electronic, programmable and general-purpose digital computer.

In other words, it was the forerunner for all the devices we now take for granted, from PCs and the Web to smartphones and self-driving cars.

It’s one of the main reasons why just the top five US tech firms are now worth a cool $8 trillion.

Now then, by today’s standards that ENIAC was simply massive. It filled an entire room. ENIAC boasted 18,000 vacuum tubes and five million hand-soldered joints.

More formally known as the Electronic Numerical Integrator and Computer, the machine could project the trajectory of a moving object in just 30 seconds. By contrast, it took a human 20 hours to perform the same calculations.

Today, it’s almost impossible to state the impact that this early machine had on our digital world. It showed electrical engineers that the key to the next generation of computing would be powerful devices with small form factors.

Just 12 years later, the first integrated circuit debuted. And as the saying goes, the rest is history – our semiconductor-driven world is filled with smartphones, self-driving cars, cloud computing, PCs, tablets, artificial intelligence and augmented reality, just to name a few.

In the past, I have recommended the iShares North American Tech ETF (IGM) ETF and enthusiastically continue to do so. Holding roughly 290 stocks, this exchange-traded-fund covers the waterfront.

We’re talking everything from satellite communications, the Internet of Things, cloud computing, e-commerce, chips, robotics, AI, and 3D printing.

An All-Star Roster

As you might expect, this robust ETF owns some of the leading names in tech today that have helped the stock market bring investors huge gains in our historic bull market.

But there’s more here than just buying big, famous names like Apple Inc. (AAPL) or Microsoft Corp. (MSFT). Take a look:

  1. Snap Inc. (SNAP) is the parent company of Snapchat, a wildly popular mobile app with great demographic appeal. Snapchat already has a strong foothold on both. Some 90% of the US population aged 13 to 24 and 75% of the US population aged 13 to 34 use the app. With 229 million daily users on average, the app reaches more 13 to 24-year-olds than Facebook or Instagram in the US, UK, France, Canada, and Australia.
  2. Cadence Design Systems Inc. (CDNS) is the clear leader in a field known as electronic design automation. It handles the core development work for its clients’ chips, printed circuit boards, wireless modems, and all related hardware systems. Microsoft Corp.’s (MSFT) Xbox One game console uses four Cadence-designed processors to create immersive soundscapes. Advanced Micro Devices Inc. (AMD) uses Cadence-designed chips in its laptop chipsets and graphics cards.
  3. Adobe Systems Inc. (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 was $80 billion in 2020. Not bad for a firm that only got involved in digital content back in 2009.
  4. Xilinx Inc. (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.

Maximum Efficiency

No doubt, American tech leaders dominate this ETF. I believe that’s a good thing because the U.S. continues to lap the rest of the world in tech innovations.

And this is a very cost-effective ETF. IGM has a cost-ratio of just 0.48%, as little as one-tenth what you’d pay for a mutual fund.

Make no mistake. This ETF has a great track record.

Since the market rebounded last March 23, IGM is up just shy of 98%. That’s more than 61% better than S&P 500’s performance over the same period.

And the longer you go back, the better it looks. Over the last five years, the S&P has gained a very respectable 103%.

But IGM absolutely crushed that track record. It gained 267%, outgunning the benchmark index by more than 159%.

This is one of the reasons why I often tell tech investors to ignore the daily noise from the media and Wall Street and take the long view.

And I believe IGM is also a great way to play choppy markets.

With a fund like this, you can always buy more on the dips and make your long-term profits even better, putting you that much closer to your goal of financial freedom.

And on top of that, we can give you even more plays to capture even more of the profit potential in the modern, tech-driven economy, and to take maximum advantage of this pivotal moment in the market.

We’ll tell you exactly which companies to buy, and which ones to avoid. All you have to do is click here to get started.

Cheers and good investing,

 

Michael A. Robinson

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