- Facebook’s stock suffered multiple declines in July 2018.
- Investors could be looking to sell their declining FB stock.
- Investors have multiple options for investing money they previously had invested in Facebook.
To put the massive drop in Facebook’s stock in context, Facebook lost a portion of its market value about the size of the entire market value of McDonald’s. That’s right, Facebook lost one McDonald’s worth of stock value. In a day.
And for many of you investors, that might have been just the sign you needed to let go of your shares. Sure, selling right after a 20 percent drop is never ideal, but there are silver linings. For one, hey, you’re not Mark Zuckerberg, so this could have been a lot worse. Second, unless you bought your shares recently, you’re probably still up on the investment even after the drop.
Click here to find out how much Facebook is worth.
And finally, you can take that Facebook money and start seeking out new opportunities. If you’re really sure that Facebook’s recent troubles weren’t just speed bumps — which they very well could be — you now have a chance to find new investments to keep your portfolio growing based on how you want to diversify your portfolio.
Click to see how much Zuckerberg and other billionaires could lose if the stock market were to crash.
What to Invest in If You Love Social Media
The good news is that seeing Facebook as hitting a plateau doesn’t mean you have to divest from social media entirely. Granted, there’s no option to simply shift to a direct competitor, but there are a number of companies in the space that are still growing and making money.
One option is Match Group, Inc., the parent company of Tinder and OKCupid. As online dating becomes ubiquitous, the revenue generated by the strongest company in the space is growing as well: From the start of 2015 to the end of 2017, the company grew sales by almost half a billion dollars and nearly tripled profits.
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What to Invest in If You Hate Social Media
If the recent cratering of Facebook stock has you believing social media is finally plateauing, you might consider staying in the tech sector but seeking out something with a more proven track record.
If that’s the case, Microsoft might be a fit for you. Sure, it’s not the most exciting company anymore, but it’s an exciting stock if you like making money. From the start of 2009 to July 31, 2018, Microsoft’s stock has returned approximately 20 percent a year.
What to Invest in If You Love Mark Zuckerberg
If the main appeal to you for Facebook was a young, billionaire CEO with big ideas about how to completely change the world, you should know you have options outside of just Mark Zuckerberg.
One might be investing in Tesla to get a piece of Elon Musk, the sometimes controversial and frequently entertaining leader of the luxury electric car maker. Musk is also pitching a pretty revolutionary vision — selling high-tech batteries and home solar systems in addition to expensive cars — so if you truly believe in Musk’s plan, Tesla stock could be worth considering.
What to Invest in If You Hate Mark Zuckerberg
If you hate Mark Zuckerberg and it’s not due to him costing you billions by squeezing you out of Facebook in college, odds are it’s because you’re not so interested in a CEO who lacks experience and operates in a business with little to no history to draw upon.
In that case, perhaps consider the company of a CEO who could be considered the anti-Mark Zuckerberg: the Oracle of Omaha himself, Warren Buffett. Buffett is in his 80s, has decades of experience, and prefers the sort of investments that are steady and predictable. Chances are, if you’re not buying what Zuckerberg is selling, you might find Buffett more to your liking.
What to Invest in If You Believe the ‘Perma-Bear’
John Hussman is well known for predicting massive sell-offs in the stock market, having done it correctly prior to the 2000 and 2008 crashes and incorrectly, well, every other time but those two.
If you, like Hussman, are envisioning a massive pullback in the near future, however, you should consider looking at bonds, most notably the 10-year T-note. Bonds inevitably rise when stocks are falling as investors scramble for safe investments, and a crash in the stock market might lead to the Federal Reserve stopping rate hikes or even reversing them.
The 10-year T-note is hovering around a 3 percent yield as of July 31 and is effectively risk-free. If you really think the end is nigh, bonds are the safest places to park your money, and getting in before the crash will spike the value of the bonds you buy now if or when it comes.
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What to Invest in If You Believe in Stock Market Rebounds
Many other investors tend to believe that the value of most stocks will keep growing in the long term despite short-term hiccups. And if you’re a believer in the rebound, odds are you aren’t selling your Facebook stock at all. Almost nothing has changed about the company itself, and it’s still making money hand over fist.
If you do want a way to move out of Facebook but still want a shot at the rebound that could be on the way, consider the Global X Social Media Index ETF. It would diversify your holdings across a variety of social media companies, but you would still have exposure to Facebook — which makes up 10.5 percent of the fund.
What to Invest in If You Want the Next Facebook
Unfortunately, if it were that easy to spot the “next Facebook,” everyone would have already done it. But Snap, Inc., is a relatively new kid on the social media block, and it’s growing fast. In 2016, it generated nearly seven times the revenue it did in 2015. In 2017, it managed to only double revenue, putting last year’s figure at a mere 14 times where it was two years prior.
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Snap has a long way to go before a Facebook comparison is apt, but that sort of revenue growth could at least be the first step. Getting in early on the next Facebook will require taking some big risks, and there’s at least a chance this could be the big risk in question.
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What to Invest in If You Want Something Long Term
As boring as this answer is, there’s likely no better long-term investment at the moment — at any time, really — than the SPDR S&P 500 ETF. It’s one of the most popular securities on global markets for a reason: The S&P 500 has averaged returns of about 10 percent a year since it came into existence, which is the sort of steady growth that will grow your investment year over year and turn your investment into a solid nest egg.
What to Invest in If You Love Tech Stocks
If you really want to stay in tech, you might consider the most-viewed website in the world: Alphabet, Google’s parent company, which also owns YouTube, the second-most viewed website in the world.
Buying stock in Alphabet means you’re getting a piece of the most dominant search engine in the U.S. by a wide margin, a social media play in YouTube, and a variety of potentially disruptive tech the company’s “moonshot” division is developing.
What to Invest in If You Hate Tech Stocks
Of course, if you’re sick of the boom-and-bust cycle of hot tech stocks that can flucutate rapidly based purely on market sentiment, look no further than utilities. The utility sector has long been renowned for offering good dividends and, well, mainly just the good dividends. You certainly won’t get anything like the sort of explosive growth in share price that Facebook has been booking year after year, but you will get a consistent return from companies providing a basic necessity.
Click through to read more about Instagram, WhatsApp and 13 other companies Facebook has acquired.
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