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 peaks 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.
Good Industries to Invest in 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’s are the fastest-growing industries to invest in:
The construction industry isn’t exactly known for being a hip new industry for investors, nor will it get grouped in 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 job growth figures of 155,000 in 2016. Helping end the year with a strong push, 30,000 of those jobs were added in December of 2017, with most of the gain among specialty trade contractors.
With a continuing growth trend, construction could become one of America’s fastest-growing industries.
2. Financial Institutions
Banks and other financial institutions could see growth in 2018 as the Trump administration continues to roll back regulations that were passed in the wake of the 2008 crash. 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 were all the rage in 2017, with bitcoin stealing the show as it grew 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. Plenty of other cryptocurrencies worth exploring exist, including Ether, Ripple and Litecoin.
The industry is likely in for another rollercoaster 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 going forward.
4. Medical Marijuana
Eight states and the District of Columbia have now legalized marijuana for recreational use, and numerous other states now allow medical marijuana. Plus, 12 more states are considering marijuana bills in 2018, which could further increase the demand for legal pot. Even so, Attorney General Jeff Sessions announced in January 2018 that he was reversing the Obama-era policy that the federal government would not interfere with states that had legalized marijuana use, leading to uncertainty as to how the industry will grow going forward.
5. 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.
6. Virtual Reality
The virtual reality industry is expected to continue rapid growth in the coming years with a 54.84 percent compound annual growth rate between 2018 and 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 standalone applications, the development of VR technology will also be important in other industries that will incorporate VR, such as education and customer support. And the industry is expected to grow as higher wireless internet speeds become widely available, including 5G.
7. Elder Care Companies
The world is getting older, according to the World Health Organization, with the number of people 60 years and older rising to two billion by 2050 — approximately 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 BLS 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.
8. Cybersecurity Industry
In the wake of the massive data breaches in 2017, companies, governments, and individuals are increasing their spending to protect themselves online. According to Cybersecurity Ventures, global cybersecurity spending is expected to be more than $1 trillion from 2017 to 2021 — compared to 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 offer initial public offerings in 2018, which could give you a chance to get in early if the newly public companies turn out to be some of the best stocks to buy for 2018.
9. 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 in this sector.
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 has recently introduced a new 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.
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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 advisor to help you make a smart investment decision.