Q&A: 5G Plays, High-Yielders, Pot’s Rebound…and More
Texting is trashing attention spans. Ever try to get your kids to actually send you a cogently written email, let alone answer your phone calls?
If it weren’t for ungrammatical smartphone texts punctuated with emojis, I’d never hear from most of the members of our family. (Harrumph!)
That’s one reason I greatly value letters from my readers. When one of you takes the trouble to send a well-reasoned email on an investment topic, it tells me that this newsletter is connecting with its audience.
In publishing parlance it’s called “mind share,” and it’s something to covet in today’s impatient world. Let’s see what’s on your minds lately.
Mega-trend investing…
“I read your August 16 article, 7 Mega-Trends That Will Outlive Today’s Chaos. How can I invest in the stocks of these secular trends?” — Tracy M.
Mind Over Markets takes a macro approach to investing, in which I provide context for deeper understanding. To receive specific investment picks, turn to our premium trading services.
Rather than pinpoint individual companies in industries that will benefit from mega-trends, one effective strategy for risk-averse investors is to choose the relevant exchange-traded funds (ETFs).
Read This Story: Using Sector ETFs as Tactical Trading Tools
Now’s the time for you to re-balance your portfolio toward recession-resistant investments. I highlight a few below.
From science fiction to science fact…
“Thanks for your column, as always. Warnings about the bull market continue, and continue, and continue, but the bull is still here. You have given some good advice about watching for 5G opportunities. How good the 5G investments are will depend partly on how healthy the bull is.
Some of the attractive companies have seen a pullback on price lately, making them even more attractive, for the moment. Just curious whether I have missed some good guidance from you on when/how to be prepared to let go of the 5G positions in case there is a new Black Monday or ‘mini’ Black Monday.” — Chris
One of the most appealing aspects of 5G (“fifth generation”) investments is their resistance to economic cycles and market ups and downs. Sure, if there’s a market crash, even solid 5G stocks will get caught in the downdraft. But generally speaking, they’re likely to fall less far and bounce back more quickly.
The following chart underscores the multi-year growth trajectory of 5G adoption around the world:
The global implementation of ultra-fast 5G wireless capabilities will provide the vital infrastructure for the Internet of Things (IoT).
IoT represents one of the most sweeping technological changes you’ll witness in your lifetime. IoT allows devices of all kinds to connect remotely in a seamless web of interoperability.
Experts estimate that 5G will eventually add $3.5 trillion to the U.S. economy. Smart homes, smart cars, smart offices…the dreams of science fiction are becoming daily reality. For the best investment opportunities in 5G, read our latest report.
The power of dividends…
“I enjoy reading your Investing Daily articles. Under the present economic situation, you consistently promote utilities, real estate and consumer staples. In your November 18 article, Trade War: The New Normal, you emphasized the strong benefits of dividends.
I presently own ETFs and mutual funds that specialize within the utilities and real estate sectors. Do these types of financial instruments benefit from dividends? As always, thank you for sharing your knowledge and insights.” — Marty L.
Yes, those assets certainly benefit from dividends. Mutual funds and ETFs that receive any dividends from the investments in their portfolios are required by law to pass them on to their shareholders.
Mutual funds must distribute their accumulated dividends at least once a year, but the timing and other details vary greatly depending on the respective fund’s policy.
ETFs also pay out the full dividends derived from stock holdings. Most ETFs pay dividends quarterly by holding all of the dividends paid by underlying stocks during the quarter and doling them out to shareholders on a pro-rata basis.
Investors may take dividend distributions when they are issued or reinvest the money in additional fund shares.
To find high-yielding income stocks now, click here for our “dividend map.”
Betting on pot’s resurgence…
“What do you think of pick-and-shovel plays in the marijuana industry?” — Joe S.
I’m bullish on them. These companies aren’t necessarily about growing marijuana nor are they developing cannabis-derived drugs. They’re infrastructure stocks that can be extremely profitable and they enjoy formidable tailwinds.
An increasing number of bills are getting introduced in the U.S. Congress and state legislatures that favor recreational and/or medical marijuana. We’re witnessing the most marijuana-friendly legislative environment in history.
Read This Story: Take Heart, Pot Investors: Prohibition Is Doomed
Marijuana investing remains risky, but you can seek safer profit potential by focusing on the ancillary firms that provide infrastructure services for growing pot companies.
Pick-and-shovel plays can be reliable money-makers, because they deliver essential value-added products and services. What’s more, they usually enjoy a diversified roster of clients in several different industries, which buffers them from the inherent volatility of the marijuana business.
Marijuana stocks have taken a beating lately, which means you can now find appealing bargains. The pot industry shake-out was brutal but inevitable.
Here’s the good news: I think quality marijuana stocks are positioned to soon bounce back, in a big way. For our favorite value plays in the pot industry, click here for a special report.
Got a comment or question on investments? No texting! Send me an email: mailbag@investingdaily.com.
John Persinos is the managing editor of Investing Daily. He also serves as editor-in-chief of Marijuana Investing Daily.