In This Volatile Market, I’m Still Looking To Profit From The Future…
The markets have been throwing a bit of a fit for the past week or so.
Before this week began, shares of the S&P 500 were trading about 4% off their all-time highs. The tech-heavy Nasdaq was down 6%, while the Dow Jones Industrial Average also slid about 6%.
Some pointed to the new Covid-19 variant, Omicron, as the culprit, but I don’t think that’s the case. At least not completely. If it was, we probably would have seen some of the top “stay at home” stocks pop, but they didn’t.
Still, it’s reassuring to see health officials (from the WHO to Dr. Fauci) state that the variant, so far, seems to produce mild to moderate symptoms.
Personally, I think the real reason the market has been in a tizzy is because of Federal Reserve Chair Jerome Powell’s recent remarks on inflation, increasing rates, and reducing asset purchases. You may remember this being referred to as the “taper tantrum” from years past.
Throw in slower hiring numbers that just came out, plus the strong year-to-date returns of the markets that have some folks harvesting losses for tax purposes, and I think these factors better explain why we’re seeing such volatility in the market.
Yet I remain bullish on stocks for a variety of reasons: For starters, economic growth is good and interest rates are low. (Even if the Fed raises them they will still be near historic lows.) Consumers continue to spend and have a stockpile of cash saved up. According to the Wall Street Journal, households have socked away close to $1.6 trillion in excess savings.
In short, I think we’ll still see a year-end rally, and at this point, I’d recommend buying what’s left of the dip. But with the markets getting off to a hot start this week, there may not be much time.
Either way, this serves as a good reminder that you should always keep one eye firmly fixed on the future. What will it look like? That’s where I want my money to be…
I’m Looking To Profit From The Metaverse
For example, one trend I’m looking to profit from in the coming years is the “metaverse”.
You may have seen this term pop up in the past couple of months. It’s the hot new buzzword in the tech world. If you’re not familiar, don’t worry just yet, as we’re all still trying to figure out exactly what the metaverse will entail. But as of right now — in the most simple terms — the metaverse is a new way for people to interact with content online primarily with the use of augmented and virtual reality.
Think of it like this… Instead of just going to a website, say Home Depot as an example, to shop for some goods where you look at detailed pictures and specifications of the product, the website transforms into a 3-dimensional building or mall, where users interact with it as in-game characters or avatars (i.e. seeing three-dimension of the product instead of just reading height and weight.)
I know it sounds like some real futuristic stuff… The term “metaverse” did come from a science-fiction novel, coined in the 1992 novel “Snow Crash” by Neal Stephenson.
My colleague Brad Briggs talked more about the metaverse in this piece, particularly within the context of how it applies to Facebook’s (Nasdaq: FB) rebranding to “Meta.”
The company has already completed the name change and announced at the end of November that it is delaying its stock ticker symbol to “MVRS” until the first quarter of 2022. No reason was given for the delay, but for now, the company is Meta Platforms (Nasdaq: FB).
Now, we’ve held shares of this company over at Top Stock Advisor for years now. We’ve absolutely crushed the market since adding it to our portfolio – and with the coming changes, I expect that trend to continue.
But this goes much further beyond Facebook… err… I mean Meta Platforms. And I intend to profit from it…
One Of My Top Metaverse Picks
Since Facebook’s announcement, many other companies are jumping on the Metaverse bandwagon. There are some familiar names you might expect to be affiliated with this trend, but others may surprise you.
For example, back in May, I told my Top Stock Advisor premium readers about a company that has positioned itself as a metaverse world builder. It’s one of the leading platforms for creating and operating gaming content. And it was on a roll since adding it to the portfolio in May. But when the Facebook-Meta announcement happened, it sent metaverse-related stocks like this one into nosebleed territory.
At one point, we were up nearly 130% (compared to the S&P’s 12%) before the recent selloff in the broader market.
But that was then, and this is now. And hyper-growth names like this were major victims of the selling pressure. Now that the market fears seem to be cooling, investors have the chance to get into this name (and others like it) back at levels before the Facebook announcement sent the hype levels completely out of control.
For context, I believe this pick is a long-term growth story that can stand on its own outside of the Facebook/Meta hype. The company recently announced a major acquisition that will allow developers to use cutting-edge graphics on its platform. This is vital, since having the best gaming graphics, real-life characters, and virtual effects is a must-have.
As I told my Top Stock Advisor subscribers back in May, I think this pick could one day become one of the world’s next trillion-dollar companies by market cap.
And while I can’t share this name with you today out of fairness to my premium subscribers, rest assured that we are still early in the game. There are plenty of other ways to profit from this emerging theme – much more than you might think, actually…
For example, Nike, Inc. (NYSE: NKE) is launching virtual footwear and apparel so you can look good in the metaverse. I’m not kidding. The company has filed at least seven trademark applications and is also reportedly hiring product designers for its metaverse efforts. The sports apparel giant is also getting ready to step into the highly-popular non-fungible token (NFT) world.
Other companies like Microsoft (Nasdaq: MSFT) are developing an enterprise metaverse. Dropbox (Nasdaq: DBX), meanwhile, is positioning itself as a player for content storage in the metaverse.
Like I said, just about everybody is now aiming to be part of the metaverse. Sure, there will be a few companies that are not worth your time who are simply trying to ride the hype train. But this is happening, and we’re talking about a major opportunity.
I’ll have more to say on this topic in the months ahead. But in the meantime, my advice is to study up on this trend.
P.S. Another major opportunity that’s developing before our very eyes is the “billionaire space race”…
My latest report tells readers all about Elon Musk’s latest brainchild — Starlink — that’s about to go “live” soon. This secretive project has been kept under wraps for years, but it has big implications for the future of space (and life here on earth). And even though Starlink is “off limits” to regular investors right now, I’ve uncovered a “silent partner” that’s tradeable right now and gets you in on the ground floor…