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.
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.
The construction industry isn’t exactly known for being a hip new industry for investors. 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. Ending the year with a strong push, 30,000 of those jobs were added in December 2017.
With a continuing growth trend, construction could become one of America’s fastest-growing industries. Employment in construction continued to rise in June 2018, adding 13,000 jobs, according to the BLS.
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 the banking industry 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, XRP 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 fear 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.
Although the cryptocurrency market can be a bit shaky, it recently experienced some good news. The price of bitcoin surged by 10 percent within an hour in July, giving bitcoin its best day in months and boosting its value above $7,000 for the first time since early June, according to The Independent.
4. Medical Marijuana
Nine states and the District of Columbia have now legalized marijuana for recreational use, and numerous other states now allow medical marijuana. 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, causing uncertainty as to how the industry will grow going forward.
But as states have made changes to legalize marijuana or decriminalize marijuana laws, opinions in Washington are beginning to change. In fact, a number of policymakers are in support of the Marijuana Justice Act, a bill that legalizes marijuana and seeks to correct the “devastation wrought by decades of marijuana prohibition” among other things, according to USA Today.
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 Energy Industry Outlook report. Declining prices have led the way to make green energy more affordable. More than 100 companies have committed to using only renewable energy, and as of early January 2018, 50 cities 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 and could become a $40 billion market by 2020, according to Reuters.
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 more widely available, including 5G.
7. Elder Care
The world is getting older, with the number of people 60 and older expecting to rise to 2 billion by 2050 — approximately 22 percent of the global population, according to the World Health Organization. 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 47 percent and 39 percent, respectively, between 2016 and 2026.
In the wake of 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 top $1 trillion from 2017 to 2021 — compared to a market of just $3.5 billion in 2004. 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.
Investing in technology paid large dividends in 2017, and analysts continue to see opportunity in this sector. For example, the introduction of 3D 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 3D tech is a growth area, Ikea recently introduced the app Ikea Place, which allows customers to test and rearrange true-to-scale digital models of Ikea furniture in their homes through a phone camera lens.
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 advisor to help you make a smart investment decision.
Click through to read about nine of the best short-term investment options.
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Taylor Bell contributed to the reporting for this article.