With 2019 coming to a close, it’s both a time to reflect and to ponder the future of hot stocks for 2020. If I had to summarize the markets this year in one word, it’d be China. Through much back-and-forth rhetoric, the U.S.-China trade war dominated the investment and political narrative. Unfortunately, based on recent presidential threats, this conflict could be with us for a while.
But if we finally get a substantive trade deal signed, one of the biggest catalysts for hot stocks for 2020 will be technology. Over the years, we’ve seen small upstarts disrupt long established markets. For the next few years, I’m going to go out on a limb and suggest that the old dogs will play new tricks. Specifically, the 5G rollout offers giant, well-resourced organizations a second wind.
Of course, forecasting the most profitable hot stocks for 2020 is a gargantuan task. Still, I think a reliable factor that you can trust is demographics. Although most countries undergo serious social change, arguably few nations are subject to dramatic paradigm shifts like the U.S. Particularly, the aging of two key demographic groups may offer substantial returns for the patient investor.
Lastly, evolving social mores and rising awareness will most likely impart political transitions. And that will invariably impact industries that depend on favorable public sentiment to catalyze growth. So, without further ado, here are my picks for seven hot stocks for 2020 to consider:
About a year-and-a-half ago, the incoming 5G rollout dominated mainstream media headlines. Particularly, the battle between telecom giants AT&T (NYSE:T) and Verizon (NYSE:VZ) to secure bragging rights for launching 5G first riveted readers across the country.
As a long-term play on the 5G rollout, either one of these hot stocks should be viable picks. However, investors shouldn’t overlook tech firm Qualcomm (NASDAQ:QCOM). Thanks to its leading 5G-capable modems which are used in smartphones and other smart devices, QCOM stock has a bright, viable pathway to multiple revenue streams.
I say this because 5G isn’t just about incredibly fast internet speeds, although this is a signature attribute. Rather, the telecom revolution finally enables other exciting tech, such as smart city infrastructures and automated transportation, to take root. With Qualcomm leading in other innovations, buying into the recent discount for QCOM stock appears a shrewd tactic.
Finally, the recent London terrorist attack highlights the importance of artificial intelligence-driven security protocols, such as facial recognition. Innovations based off 5G may help deliver lifesaving systems, which is another reason to like QCOM stock.
Tech icon IBM (NYSE:IBM) was once one of the most revered titans in its industry. Up until recently, though, IBM stock has been somewhat of an afterthought. In the cloud computing space where “Big Blue” is attempting to shake things up, the company has fallen behind modern powerhouses like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN).
For that and other reasons, many investors won’t give IBM stock a fair shot. In some ways, I sympathize with the sentiment. Although shares are up over 16% year-to-date, the equity value has essentially flat-lined since late January of this year. Thus, at first glance, IBM doesn’t appear a natural candidate for hot stocks to buy.
Still, I think 2020 and the years ahead may witness a transition in tech. Specifically, early adopters have already picked the low-hanging fruit of markets such as cloud computing. Therefore, future innovations (i.e. cloud container systems like Kubernetes) will require deeper resource investments.
This dynamic benefits IBM stock in that the underlying company has fairly deep pockets. IBM has also made key acquisitions like Red Hat to bolster their position in the cloud’s second wave.
A real estate investment trust, Welltower (NYSE:WELL) admittedly gives me pause. If we don’t get a trade deal signed, I’m not sure if property values will stay elevated. But what brings more confidence to the table is the core specialty underlining WELL stock: housing for seniors and assisted living services.
Although several hot stocks related to retirement and senior care have incurred some choppiness this year, the demographic reality remains: every single day, roughly 10,000 baby boomers turn 65. Thus, for well-heeled seniors, they can open their wallets to companies like Welltower. Even if economic trends delay retirement for many, eventually, they’ll require specialized services, naturally boosting WELL stock.
As you might expect, this mass of humanity reaching the traditional retirement age of 65 burdens our social security network. Therefore, it’s not inconceivable that members of Generation X and Y will help with assisted living costs. It’s cynical but this dynamic also lifts the long-haul case of WELL stock.
Carriage Services (CSV)
The millennial generation often blames baby boomers for ruining this country. I think this is very poor thinking in terms of the stock market. Honestly, baby boomers represent the hottest of hot stocks for 2020: you can profit off their servicing (as with Welltower) and you can profit off their passing.
How? Let me introduce to you Carriage Services (NYSE:CSV). Look past their flowery photographs and their choreographed euphemisms. At the heart of the bullish thesis of CSV stock is a very simple principle: everyone dies. In that sense, Carriage Services is truly a guaranteed, no-brainer investment.
Dark humor aside, CSV stock stands to benefit from the most powerful demographic force in American history. With a record number of births during the post-World War II generation, this translates to record number of deaths later.
Of course, CSV stock isn’t the most feel-good of hot stocks. Nevertheless, this is a demographic reality that will not change. It’s up to you if you want to profit from it.
Meet Group (MEET)
Ordinarily, I like to put risky, volatile names near the bottom of my gallery articles. However, I’m going to make an exception with Meet Group (NASDAQ:MEET) because it fits into my demographic motif. As a social media and networking specialist, Meet proves that demographic discussions don’t have to be sour. In fact, MEET stock has a very compelling narrative.
Principally, the organization is akin to Facebook (NASDAQ:FB), with one major distinction: Meet Group focuses on initiating contact through its library of apps for the purpose of in-person meetups. With Facebook, you’re largely dealing with contacts you have already established in “real life.”
Two factors drive the bullish case for MEET stock. First, social stigma associated with internet dating has faded. That’s because an increasing number of people are trying the online method. Second, the youngest millennials are now in their early to mid-twenties. This implies that the entire generation on average is older and has more money to spend.
General Motors (GM)
My most contrarian pick among the hot stocks for 2020, General Motors (NYSE:GM) has finally made American cars great again. According to various automotive magazines, General Motors’ upcoming 2020 Chevrolet Corvette is powerful but refined. The latter adjective is a term that hasn’t been associated with American cars since, well, ever.
Like President Donald Trump, I prefer my cars to be built by German hands, not lazy American ones. However, the Corvette could very well be a gamechanger. Scheduled for release in early 2020, the new Corvette outperforms and undercuts its European premium-label competitors. Thus, unlike the president, the Corvette builds bridges to lesser-privileged drivers, not walls.
I don’t think you can ask much more from a car company. Therefore, GM stock appears very appealing.
And while companies like Tesla (NASDAQ:TSLA) threaten to undermine investments like GM stock, consider this: although electric vehicles are growing in number, the technology to improve fossil-fueled cars is likewise rising. In other words, if you want a better automotive deal, go “old school.”
Innovative Industrial Properties (IIPR)
Stability is not a term you would use to describe hot stocks in the cannabis space this year. Due to disappointing fiscal performances and the Canadian government’s inability to roll out legalization effectively, many players sank. But Innovative Industrial Properties (NYSE:IIPR) and IIPR stock has gone against the grain, providing relatively reliable returns.
What’s their secret? Mostly, it has to do with Innovative Industrial’s core business. As a REIT focused on purchasing income-producing properties for the medical cannabis space, IIPR stock is remarkably transparent. Rather than being a “pot stock,” Innovative Industrial’s decisions have to make sense: as a REIT, they must pay out at least 90% of their taxable income as a dividend.
Put another way, you’re not going to find too many fairy tale gambles with this company. Essentially, IIPR stock is the more conservative way to invest in weed. With rousing public support for legalization, Innovative Industrial should see many years of growth.
As of this writing, Josh Enomoto is long AT&T.