[Charts] An Emerging Cyber Opportunity
If you’re a regular Trend Trader Daily reader, you know the drill by now. So go ahead and scroll down.
For the newbies, here’s the deal…
Each week, I embrace the adage that “a picture is worth a thousand words.” And I select a handful of graphics to put the week’s investment news into perspective for you.
All it takes is a quick glance and you’ll be up to speed — and more importantly, poised to profit. So let’s get to it…
Cyber Threat = Opportunity
The recent spate of crippling ransomware attacks proves a point I’ve been making for years: we’ve criminally underinvested in cybersecurity protection for far too long.
Throw in the rapid digitization of everyday life, and our world has never been more vulnerable to attack.
Now for the good news (and opportunity)…
It appears investors are finally waking up to this dire need — and finally paying up to own the major protectors of our digital world: cybersecurity companies.
In the face of rising valuations and attacks, we’d be wise to stuff our portfolios with under-the-radar but up-and-coming players in the sector!
Speaking of opportunities…
Set It and Fuggedaboutit
A new trend is sweeping the money management world, whereby traditional mutual fund managers are converting to exchange traded funds.
I don’t blame them, either. Investors can’t seem to get enough of ETFs.
As you can see below, at $497 billion, inflows are on the brink of breaking the record for annual investment.
My take? Bring it on!
The overwhelming majority of ETFs are passively managed, whereby they automatically buy and sell investments based on an index.
Only a handful are actively managed, whereby managers pick individual securities based on their underlying fundamentals and profit potential.
In fact, less than 5% of the roughly $6 trillion invested in ETFs is in active funds.
Newsflash: It’s impossible to earn market-beating returns with a passive investing strategy.
And since earning market-beating returns is all I’m concerned about, I’ll stick to good old-fashioned stock picking, and welcome the fact that there’s less and less competition.
Everyone else can keep their “set it and forget it” passive investment strategies!
Shop Till We Drop (Again)
Apparently, I’m not the only old-fashioned kind of guy in the world. As it turns out, consumers are getting back to their old ways, too.
Retail spending unexpectedly rose 0.6% in June, versus expectations for a 0.4% decline.
What gives? Simple. The American consumer is applauding the reopening of the economy by reopening their pocketbooks.
Of the nine of 13 retail categories posting gains, the strongest upticks occurred for electronics, clothing, and restaurants. In other words, the usual suspects of American consumerism.
After a long pandemic-induced hiatus, a little return to normalcy retail therapy never felt so good.
And from an investment standpoint, here’s what this means:
Be on the lookout for the next wave of reopening-related trades!
Ahead of the tape,
Editor and Founder, Trend Trader Daily