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Opportunity Investing

There are many successful investing strategies.  Warren Buffett likes to buy-and-hold.  For Jimmy Buffett, it’s always 5 o’clock somewhere.  Some people say diversify (don’t put all your eggs in one basket) to reduce risk.  Others look for opportunities that lead to tremendous growth.

Let’s take a closer look at “opportunity investing”.  There are always Investment opportunities.  They come and go, some are good and some are bad.  If you’re old enough to be reading this while drinking your morning Starbucks Green Tea Crème Frappuccino®, then you probably remember the dotcom boom in the late 1990s, or the real estate boom in the mid-2000s.  Presently, there are several investing themes that have people excited, including:  cannabis, genomic revolution, blockchain (bitcoin), eSports, sports betting, and 5G.

One opportunity we believe will have a tremendous and long-lasting impact is 5G.  PC Magazine says “5G is an investment for the next decade”.  So, “What is 5G” you may ask?  Let’s take a look.

  • 1G – brought us the first generation of (analog) wireless phones (those bricks we loved in our cars)
  • 2G – brought the first digital phone and introduced data services (e.g., SMS messaging)
  • 3G – introduced broadband and enabled smart phones that we have today
  • 4G – brought increased speed that supported high-definition TV and video gaming, etc.

5G is the Fifth Generation of mobile (and data) communications.  5G will greatly increase the speed and ubiquity of mobile communications, delivering unparalleled benefits to society and business.  A study by Ericsson and Arthur D. Little predicts that revenues from 5G will grow by 13.3% per year to near $3.3 Trillion by 2026.

Imagine … downloading movies in seconds, autonomous-driving vehicles, renewable energy generation, infotainment on the move, betting on individual sports plays anytime/anywhere, wearable transmitting cameras, smart cities with intelligent infrastructure and public surveillance everywhere, digitally powered supply chains, enhanced and secure digital payments for anything/anytime, healthcare delivered on-demand to any location … many call this the Internet-of-Things (IOT) and it will all be enabled and delivered by 5G.

Now, if you are excited about 5G, you may be wondering how do I invest in this opportunity?  Well, the standard answer is “it depends.”  It depends on you.

  • Stocks – you can buy stocks in individual companies.  Maybe communication carriers like AT&T or Verizon.  Maybe infrastructure companies like Cisco or American Tower.  Maybe hardware companies like Apple or Ericsson.  Maybe software companies like Microsoft or Qualcomm.  Maybe companies you’ve never heard of like Xilinx, Infinera, Amdocs, Viavi.  Of course there is Google and Amazon who are into everything.
  • Bonds – If you want income or more safety, you can buy bonds in the companies mentioned above.
  • ETFs – if you’d like to diversify and own many of the companies involved, there are already some ETFs that cover 5G such as FIVG from Definance or FONE from First Trust Portfolios.  There will certainly be more in the future as 5G rolls out.
  • Do nothing – maybe you’re like the guy in the TD Ameritrade commercial and think it’s all just “too complicated.”

This is where an advisor, like oXYGen Financial, can help you decide what’s right for you.

  • Should “opportunity” investments have a roll in your portfolio?
  • Which opportunity investments are right for you?
  • If so, what portion of your portfolio should you allocate to “opportunities”?
  • What is the best investment vehicle to access a particular investment opportunity?

About the author  ⁄ Mike Grizzard

Mike Grizzard

Mike is responsible for developing investment strategies for oXYGen Financial.

He's a Ramblin' Wreck from Georgia Tech. Even though he graduated summa cum laude and was a Rhodes Scholar candidate, he's more than oXYGen's financial nerd. At Tech, Mike was known to have thrown a few double-leg circles or Thomas Flairs around the Pommel Horse. Today, when he's not pouring over financial reports and identifying new investment ideas, you might find him anywhere from the top of a 14,000 foot peak in Colorado to sipping wine along the Champs-Élysées in Paris.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation.

Background and qualification information is available at FINRA's BrokerCheck website.

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