If the market’s choppy action has you feeling confused, that’s a very natural reaction – to short term news.
With inflation, skyrocketing gas prices, and war in Europe dominating headlines, we’ve seen major indexes show one-day swings of as much as 2.5% in a single week.
And some of the biggest names in tech are off by massive amounts.
Consider that Meta Platforms Inc. (FB), formerly known as Facebook, fell by 51% in the seven months ended March 7. E-commerce leader Shopify Inc. (SHOP) dropped 65.5% in 14 weeks before bottoming out on March 9.
But here’s the thing. If history is any indication – and it reliably is – then we have a massive rebound on the horizon.
There’s simply no denying that the future belongs to high tech across the board.
Did I mention that this play has a history of doubling the S&P 500’s returns? Let me show you…
One Investment Captures the Tech Market
Now then, as a “Boomer of a certain age,” I can relate to what investors are going through today.
You have to go back decades to find a time frame similar to ours. In the 1970s, we had massive inflation set against the Vietnam War followed by an oil embargo and then a hostage crisis.
And yet, the market has powered through it all to set a series of record highs just a few weeks back.
It’s like I keep saying: You have to ignore the daily news and focus on the long haul. If you do that, you’ll see immediately that the future belongs to tech across the board.
Tech remains 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 (AI), e-commerce, the mobile wave, virtual reality (VR), the connected car, fintech, and much, much more are all working together to make the U.S. a very tech-centric economy.
But at times like these, the average retail investor can find the headlines and choppy trading daunting, to say the least. For instance, the S&P 500 rebounded on February 23 only to sell off again seven sessions later.
So, it’s impossible to say if the market’s most recent rebound has real staying power.
That’s why I want to tell you about a great long-term play that allows you to cover the entire world of tech in a single investment with a history of crushing the broader market.
It’s the iShares Expanded Tech Sector ETF (IGM). Holding 348 stocks, this exchange-traded fund leaves no stone unturned in the search for maximum gains.
We’re talking everything from satellite communications, 5G mobile, 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 through the end of last year.
But there’s more here than just getting exposure to big, famous names like Apple Inc. (AAPL) or Microsoft Corp. (MSFT).
Take a look at some of IGM’s other notable holdings:
- Arista Networks Inc. (ANET), a leading provider of networking hardware and software for large data centers and cloud providers. Founded in 2004 in the heart of Silicon Valley, Arista’s network switches are the devices that allow several different computers and networks to be connected together. The device switches can even come with a built-in AI right on the switch ‘s chips. Leading clients include VMware Inc. (VMW), Zoom Video Communications Inc. (ZM), Microsoft, and Slack.
- Enphase Energy Inc. (ENPH) is a leading supplier to the solar power industry. It offers highly efficient “micro inverters.” These devices make solar power far more efficient at converting solar-panel DC electricity, which is like you find in batteries, into an alternating current (AC), which is what we use around our homes, offices, and factories. The company has shipped over 39 million micro inverters to more than 1.7 million solar installations across 130 countries.
- Onto Innovation Inc. (ONTO) ranks as one of the top chip supply firms in the world with strong growth in sales and profits, with the latter rising 71% last quarter. Onto Innovation is a one-stop-shop for the crucial quality control processes and technology that the semiconductor chip industry desperately needs. It also has offerings in defense and aerospace. All in all, the company puts its total addressable market at over $9 billion.
- Palo Alto Networks Inc. (PANW) offers a suite of cybersecurity tools used by large organizations across a range of industries. Palo Alto offers the full gamut of cyber products, from network-based security hardware and software, to AI analytics that scour a company’s cloud for unusual activity and other signs of hacking. Two-thirds of Fortune 100 companies use the firm’s Cortex AI-based platform. Ironically, the AI last year prevented a hack on Palo Alto Networks itself.
No doubt, American tech leaders dominate this ETF. And that’s a good thing because we remain the epicenter of tech innovations and performance.
Plus, having little to no Chinese or Russian exposure right now is a real plus right now given the intense geo-political situation.
Make no mistake. This is a market crusher.
Over the five years ending February 28, the last period for full data, the S&P 500 has gained a very respectable 81%. By contrast, IGM is up over 166.6% in the same period.
That means this all-inclusive, U.S.-focused fund crushed the board market by a stunning 105%.
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. It’s also a great vehicle for dollar-cost averaging in which you buy a set dollar amount regularly, usually monthly or quarterly.
IGM forms a solid base for a great, high-earning tech portfolio that will help get you to financial freedom – through good times and bad.
If you’re serious about setting yourself up for financial freedom – and my guess is you are – you need to be looking at cryptocurrency investing. Because with crypto, no one else owns your money. It’s yours. It’s safe. No one else can take it. And anyone can participate.
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Cheers and good investing,