Investors are scared, but history shows remaining invested pays off … and should do so even more for 5G investors

 

Stocks took a beating yesterday, and as I write Tuesday morning, the selling is continuing with the Dow down another 150 points.

With the coronavirus threatening to grind global commerce to a halt, is now finally time to get out of the market?

If your answer is “yes,” you should remember that saying “yes” during past crises over the last decade would have been a truly self-defeating decision.

See for yourself — the chart below comes from Charlie Bilello.

If you’re having trouble reading smaller font, the chart overlays many of the past decade’s crises onto a chart of the broad stock market.

For instance, there’s the BP oil spill, the U.S. debt downgrade, the Fiscal Cliff, Ebola, the U.S. Government shutdown, Brexit …

It’s a long list of seemingly-perilous moments. Yet at the end of it, the market is still up nearly 500%.

 

 

There’s a reason the old phrase goes “stocks climb a wall of worry” — namely, there’s always something to worry about.

Now, this doesn’t mean investors can simply shrug off whatever’s happening in the headlines. After all, depending in your age, financial situation, and proximity to retirement, you might not be able to weather, say, a 30% market decline.

But for investors with more time on their side, it’s critical to remember the big-picture, and not allow short-term fears to derail long-term wealth.

In other words, let’s try not to allow this …

 

… to result in fear-based selling that leads us to miss this …

So, in today’s Digest let’s pull back and refocus on the big picture.

Specifically, let’s look at how one technological advancement is going to reshape our world over this new decade, and create huge investment gains in the process …

5G.

Matt McCall, editor of Early Stage Investor (ESI), calls 5G “the next great leap in communication technology.” In ESI, Matt tracks the most influential trends that are shaping the world, then he finds small, explosive stocks that are a part of those trends, and puts his subscribers in position to ride them higher.

In Matt’s most recent issue of Early Stage Investor, he revisited 5G, and set the stage for what’s to come in the near future:

Similar to the 1990s, smart investors again have rare opportunities for life-changing profits …

Today, we’re in the early stages of the next economic ascension, one that will dwarf those that came before.

What’s coming will be so big and so revolutionary that it’s nearly impossible to overstate the magnitude of 5G’s impact on society and on our daily lives.

And … 5G is going to be one of the most powerful wealth-creation forces we’ve ever seen.

For investors who recognize this now, the opportunity could be life changing.

Let’s jump in.

***The revolution at our doorstep

 

Odds are you’re already generally familiar with 5G, but to make sure we’re all on the same page about the scope of its impact, here’s Matt:

5G is the groundbreaking new wireless network being built out across America. It’s going to increase our internet speeds by more than 1,000% …

4G network speeds clock in at around 100 megabits per second, which is extremely fast compared to its predecessor. Once 5G rolls all the way out, that speed jumps to 10,000 megabits per second — or 100 times faster than the current network!

Now, the skeptic is going to say “great, so we’ll be able to download movies faster. That’s not really a big deal.”

Sure, if the only benefit was downloading movies faster, then it wouldn’t be a big deal. But there’s a far more important story here.

Back to Matt:

The transformative breakthrough will be the ability to connect millions more devices that share large amounts of data in real time … The widespread impact will be felt in just about every corner of our lives and economy.

At this point in his issue, Matt dives into some real-world illustrations of what’s coming our way thanks to 5G’s speed.

For example, take Smart Cities — basically, an urban area that uses Internet of Things sensors to collect vast quantities of data to then analyze and use in a beneficial manner for its citizens. Think easing traffic congestion, or rectifying issues with water supply, or increasing crime detection.

The volume of this data, and the required speed of its transfer, simply couldn’t exist without lightning fast connections. But that’s what 5G offers.

Back to Matt:

We’re already seeing smart cities emerge as connectivity helps monitor traffic, energy, crime, and more, but the smart city I envision is just starting to take shape.

A lot of cities have held back on spending until 5G is ready to roll out in earnest. Think about what becomes possible: real-time connections between traffic cameras and the police department, traffic lights that change based on conditions at that moment, and smart streets embedded with sensors that pass data to the municipalities.

Another example relates to the growing importance of “the cloud” in our lives.

Matt explains how a decade ago, people didn’t even know what “the cloud” meant. But today, our documents, photos, music, and frankly, just about everything else, lives in the cloud. This represents an enormous quantity of data. Yet with 5G, retrieval will be nearly instantaneous … even on our phones, from anywhere.

Then there are the advancements 5G is enabling with virtual reality (VR). But VR isn’t just for gamers, or a fun amusement. With 5G speeds, retailers can offer you and me a nearly real-time and real-life shopping experience using VR … without us ever leaving our homes.

Then there are the advancements in health care, artificial intelligence, and autonomous vehicles that will come thanks to 5G. The societal impact is simply too vast to capture in this one Digest, so here’s Matt for the bottom line:

When you add it all up, the rollout of 5G is going to be much bigger than 4G.

4G was an improvement. 5G is a game changer.

Over $50 trillion in new revenue will be added to the economy over the coming years, and those who become early backers of these technologies could make a fortune.

That’s why I am excited about this once-in-a-lifetime opportunity. And why you will continue to see me pound the table on the 5G investment opportunity for years to come.

***So, what’s the right investment strategy?

 

To answer this, Matt uses an analogy involving the buildout of a new highway.

From Matt:

… anytime a major highway is built in America, the companies that build the highway enjoy a surge in revenue.

That’s because lots of concrete, asphalt, gravel, and steel goes into a highway, so raw material suppliers do well …

But once a highway is built, construction companies and raw material suppliers make no more money on the project.

It’s a “one and done” revenue opportunity.

Good, but not great.

The world’s best entrepreneurs and investors know the buildout of a major highway creates a FAR LARGER and FAR BETTER profit opportunity than the actual building of the road.

This wealth-building opportunity is typically 20 to 30 times bigger than the buildout.

When a highway is built, the huge, life-changing money is made not from its construction — which is a short-term phenomenon — but by owning businesses that bloom and flourish alongside the new highway.

 

***Today, as many investors are focusing on the 5G buildout itself, the real wealth will come from the businesses this buildout serves

 

These are businesses that operate in the sectors we referenced earlier — the Internet of Things, data storage, virtual reality, artificial intelligence, and so on … These are the industries that will flourish thanks to 5G’s speed.

Back to Matt:

Fortunes are made not from the construction of a highway but from the decades of traffic the highway carries.

This is the most important financial concept you can possibly understand right now.

That’s because the 5G communication buildout is going to be the biggest, most important, most lucrative new “highway” built in our lifetimes.

And the next trillion-dollar companies — the next Amazon, the next Alphabet, the next Netflix — are being hatched in research facilities and garages around the world. These firms will further change the world and revolutionize our economy.

If you follow technology even a little bit, you know what fields these companies will operate in: self-driving cars, artificial intelligence (AI), virtual and augmented reality, the Internet of Things (IoT), mobile payments, precision medicine, and on and on.

Here in the Digest, we’ll be bringing you investment ideas that will benefit from this 5G buildout. If you want Matt’s help in finding specific companies within these sectors, click here.

Circling back to the top of this Digest, yes, there’s fear in the market today. And it appears we’re in for more turbulence before investors find their footing. But pulling back and looking at the big picture, this decade is going to see huge gains from select growth-companies thanks to 5G connectivity.

Here’s Matt with the last word:

It would be hard to overstate the importance and the opportunity of the 5G rollout just now getting under way.

This new communications revolution will drive some of the most powerful tech trends the world has ever seen.

… to make the big money, you need to invest early. The rollout has started, but there is still time to get in for the biggest profits.

Have a good evening,

Jeff Remsburg