Finding lucrative industries to invest in can be a good strategy if you’re looking for new opportunities. But, throwing money at a hot, new stock isn’t always the best game plan. Instead, take the time to research any company that piques your investment interest. Even though one company might show industrial strength, another one in the same sector might not do so well.
For example, both Scana Corp. and NRG Energy Inc. are utilities, but NRG was up 132 percent in 2017 and Scana dropped by 46 percent. Unfortunately, there’s no promise that any specific company will rank as one of top stock picks for 2018.
When trying to pinpoint which industry deserves your dollars, it can help to pay attention to trends. Although industry sectors showing growth can be a good thing, sometimes the growth is coupled with volatility, which makes for higher risk.
Take a look at these nine quickly growing industries that might prove to be good investment opportunities, but research individual stocks and companies before making any big moves. Here are the fastest-growing industries to invest in:
–– Construction: Construction isn’t known for being a hip new industry for investors, nor will it get on an emerging-industries list. But, according to the U.S. Bureau of Labor Statistics, construction employment increased by 210,000 in 2017 — an impressive gain from 155,000 in 2016. Helping end the year with a strong push, 30,000 of those jobs were added in December, with most of the gain among specialty trade contractors.
With a continuing growth trend, construction could become one of America’s fastest-growing industries.
–– Financial institutions: Banks and other financial institutions could grow in 2018 as the Trump administration continues to roll back regulations that were passed after the 2008 financial crisis. These regulations have raised costs on banks, and rolling them back could make banks more profitable.
According to a survey by S&P Global Market Intelligence, almost half of banks surveyed said compliance costs had risen by 20 percent or more. The reduction of these costs resulting from revised or reversed regulations could position financials as one of the top sectors for 2018.
–– Cryptocurrencies: Cryptocurrencies were all the rage in 2017, with bitcoin stealing the show as its value rose from just under $1,000 per coin at the start of the year to over $19,000 in mid-December. But bitcoin isn’t the only option. There are plenty of other cryptocurrencies worth exploring, including ether, ripple and litecoin.
The industry is likely in for another roller-coaster year, so even if cryptocurrencies could be one of the best sectors for 2018, this industry isn’t for investors who are faint of heart. Besides fears that cryptocurrencies have security issues and are merely a bubble waiting to burst, there is also uncertainty as to how governments will attempt to regulate the industry.
–– Medical marijuana: Nine states and the District of Columbia have legalized marijuana for recreational use, and numerous other states allow medical marijuana. Plus, 12 more states are considering marijuana bills this year, which could further increase the demand. Even so, Attorney General Jeff Sessions announced in January that he was reversing the Obama administration policy under which the federal government would not interfere with states that had legalized marijuana use, leading to uncertainty as to how the industry will grow.
–– Green energy: Though the green energy industry has regulatory uncertainty to deal with in 2018, consumer demand continues to grow, according to Deloitte’s 2018 Renewable Industry Outlook. Declines in the price of wind and solar energy have led the way to make green energy more affordable. More than 100 companies have committed to using only renewable energy and, as of late 2017, 170 mayors had expressed support to transition to using only renewable energy sources to power their communities, which could pave the way for further growth in the industry.
–– Virtual reality: The virtual reality industry is expected to continue rapid growth in the coming years with 54.84 percent compound annual growth from now to 2023, according to a report from research and consulting firm Mind Commerce. But your investment options to take advantage of growing VR applications consist of more than just popular video game companies.
In addition to stand-alone applications, the development of VR technology will also be important in other industries, like education and customer support. And the industry is expected to grow as higher wireless internet speeds become widely available, including 5G.
–– Elder care: The world is getting older, according to the World Health Organization, with the number of people 60 years and older rising to 2 billion by 2050 — about 22 percent of the global population. And as the world’s senior population grows, more investment opportunities in companies that serve this age group become available, such as home health care. The Bureau of Labor Statistics expects the demand for home health aides and personal care workers to grow by 40 percent between 2016 and 2026, which translates into almost 1.2 million new jobs.
After the huge data breaches in 2017, companies, governments, and individuals are spending more to protect themselves online. According to Cybersecurity Ventures, global cybersecurity spending is expected to be more than $1 trillion from 2017 to 2021 — compared with a market of just $3.5 billion in 2004 — making it one of the fastest-growing industries in the world. In addition, Investor’s Business Daily expects several closely held internet security firms to make initial public offerings in 2018, which could give you a chance to get in early.
–– Technology stocks: Investing in technology paid large dividends in 2017, but it’s uncertain if the trend will continue. Bloomberg is less enthusiastic about the sector, because of the potential for increased government regulation. But other analysts see opportunity.
For example, the introduction of 3-D sensing technologies on Apple’s iPhone X is just the tip of the iceberg for that tech’s applications, according to Fidelity Investments. To further support the idea that 3-D tech is a growth area, Ikea recently introduced a feature that allows customers to scan a room in their home to produce a 3-D image, and then rearrange digital models of IKEA furniture to get an idea of what the pieces would look like. Also, companies that manufacture smartphone component items such as cameras and microphones could make good investment opportunities.
Before you invest in any industry, do your due diligence by researching the most successful public companies within that industry. If you’re still unsure how to invest your money, consider hiring a financial adviser to help you make a smart investment decision.
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