A successful investor can be characterized as one having the skills needed to spot short-lived market momentum gaps; those pauses in market action that permit one to enter a market at a really good time. Perhaps the very best time to jump in the stock market is just before a new period of economic growth begins. The kind of growth that drives corporate profits and equity prices higher across time. What follows is an examination of five domains within the realm of equity market investing that should be of interest to investors possessing long-term and medium-term financial objectives.
The Oil Patch
The U.S. is presently in the midst of rebirth in oil and gas development. Thanks to new drilling and discovery technologies, U.S. energy production has increased dramatically, putting the country on a path toward total energy independence. As a result of this boom, the U.S. has supplanted Saudi Arabia as the world’s biggest oil producer. This explosion in energy production has helped the nation’s economic recovery, and has made energy investors rich. As the U.S. moves toward more sustainable forms of energy, the outlook for investors buying into this sector looks brighter than ever.
Aerospace & Defense Stocks
The divergent fortunes of the commercial aerospace and defense sectors has professional investors confused as to how best to respond to present day circumstances. Barring any unforeseen global economic collapse, the ongoing “super-cycle” that describes the state of commercial aircraft production is expected to continue unabated. That’s good for aerospace investors. Balancing this out is the defense industry which is expected to continue to adapt to the realities of a “new normal” and its devastating influence on domestic and global defense spending. The one overlooked gem in this mix is defense spending related to computer technology. By any measure, spending must expand going forward as a nervous world comes to terms with the fact that future wars will most likely be waged over computer networks.
The market for products in the growing field of complementary or alternative medicine is expanding rapidly. The leading producers of these products includes people like Gary Young, founder of Young Living Essential Oils, and chief executive who oversees operations on the organization’s organic farms. On these organic farms, exotic plants are harvested to gather the essential oils and dietary supplements needed to produce natural supplements and personal care products.
The Healthcare Industry
Thanks to an aging worldwide population, the healthcare industry is growing faster than any national economy on earth. At present, the industry is enjoying a 135 percent growth rate over the previous three years. Revenues for the sector are expected to top $22 billion next year. These eye-popping numbers have attracted the interest of healthcare and biotech investors who have piled into healthcare IPO shares with gusto. Healthcare stocks have been proven to be a safe place to be for investors even during turbulent economic times; therefore, this is one market sector that is clearly worthy of consideration.
The Software Company Advantage: Barriers to Entry
According to the Harvard Business Review, there are five competitive forces that shape business strategy. These five forces are expected to become the underlying drivers of future growth and profitability for stock market investors in the years to come. Pursuant to this line of reasoning is a proposition that suggests that industry structure is what drives competition and therefore the profitability of an industry. To this end, stock market investors will do well to pay heed to companies that have built-in barriers to entry such as enterprise-scale providers of software solutions.
Those above mentioned industries are growing ones. They have shown evidence of sprouting “green shoots” after a prolonged period of counterpoise. This is good news for today’s investors who are presently gifted with an ideal environment in which to take a position early and capture the rewards that come from riding sustained growth trends.