Best industries to invest in 2019 – Overview
In 2018 the best performing sectors were: health care, consumer discretionary and real estate and at least two of these sectors should rise in early 2019. Sam Stovall, chief investment strategist at CFRA Research in New York, says the beginning of the year can be good for the stock market. He claims that in May and October are less, up 1.4 percent on average 64 percent of the time, and defensive sectors like health care and consumer staples sectors hold up best, he says. “That sort of justifies the old adage that says when the going gets tough, the tough go eating, smoking and drinking,” Stovall says. Here are industries worth to invest in 2019, but as you will clearly see the technology plays the main role.
Where you should invest your money in 2019?
As U.S.News reports in 2019 you should invest in 9 main sectors:
– Health Care
– Consumer discretionary
Let’s focus on some of them and characterize them briefly.
Financial industry challenges are largely generational. The late 1800s was marked by notorious gangs that plundered banks throughout the American Wild West. The 1900s witnessed women struggling to enter the male-dominated banking industry. And now? Well, now we have digital banking. The long-held promise of digital technology to transform financial institutions has not been broken. It just hasn’t been fully kept. The digitization of the financial industry was supposed to solve problems. And it has. It has also created some new ones in the process.
And what are the challenges financials need to face?
– Cybercrime in Finance
Cybercrime solutions emerge to protect financial services, blockchain technology must be the foundation. Period. As more and more institutions adopt distributed ledger technology (DLT), blockchain will become the de facto solution to keeping financial data secure while at rest. Integrating DLT with existing financial infrastructures poses some serious obstacles that must be overcome. Even so, we are past the point of asking whether blockchain is the holy grail of financial data security. It is.
– Regulatory Compliance in Finance
Regtech is an emerging industry that can help ease the burden of compliance. By using the latest FinTech technologies to address regulatory compliance, RegTech startups are bridging the gap between regulators and the financial service industry.
– Big Data Use in Finance
Big data provides both opportunities and obstacles for financial service providers. Tapping into social media, consumer databases, and even news feeds can help banks better serve their customers, while better protecting their own interests.
– AI Use in Finance
Industry experts believe that AI will transform nearly every aspect of the financial service industry. Automated wealth management, customer verification, and open banking all provide opportunities for AI solution providers.
– Fintech Disruption Of The Financial Service Industry
Penetration of Fintech among the US Financial Sector (a sample of 1300 companies)
Realizing that partnering with startups might be more prudent than opposing them, 64% of financial service leaders say they plan to collaborate with FinTechs in the future.
– Customer Retention In The Financial Services Industry
What matters to most customers in 2019 is greater personalization, more automated services, and easier access to services. Institutions that can deliver all three will capture their share of the market.
– Employee Retention In The Financial Service Industry
Institutions that want to attract and retain a qualified workforce must change their philosophy. No longer is it enough to offer good pay and benefits; workers now expect employers to nurture a culture that is accommodating to the values and lifestyles of the employee.
– Blockchain Integration In Finance
We talked earlier about blockchain as a key component in the battle against cybercrime. But data security is not the only application for blockchains in the financial sector. Far from it, cases across the globe are already proving the value of blockchain in a wide variety of banking and investment applications. From solving challenges faced by investment banks to helping customers make safer payment transactions, the list is growing daily.
– Customer Experience In The Financial Services Industry
CX isn’t just a buzzword, it is one of the most important issues facing firms in the financial services industry. Banking customers, today, expect banking to be mobile, with a la carte services, and they don’t care if the bank is a FinTech no one ever heard of.
– Crossing The Digital Divide In Financial Services Marketing
Success in the era of digital banking means more than having a mobile app. It means digitizing your entire brand. How do you do that? You shift your advertising campaigns from conventional ad media to digital channels. Which is another way of saying you reach your target audience where they are today, rather than where they were yesterday. Of course, social media exposure is necessary, but you need more than a Facebook ad. You must tap big data and AI to help locate potential customers, and to deliver customized offers in real time.
According to a recent survey, only 7% of financial companies have implemented a cloud-based technology stack. The reluctance to adopt technological solutions is understandable. After all, banking did quite well for hundreds of years without them. But the digital banking revolution has begun, and it will not end till the last institution has crossed the digital divide. Whether your company makes the transition successfully or gets left behind will depend on one thing: do you see digital banking technology as a problem, or the solution?
So let’s talk more about Fintech!
Financial technology looks set for another bumper year in 2019, as start-ups continue to disrupt the financial sector. According to KPMG, global investment in the space soared during the first half of 2018, with $57.9 billion invested across 875 deals; that’s substantially more than the $38.1 billion invested during the entire 12 months of 2017.
And this spectacular growth looks set to continue unabated. A report published in September by Envision Intelligence found that the fintech sector will enjoy an incredible CAGR (compound annual growth rate) of 74.16 percent from 2019 to 2025. “Growing internet penetration and increasing availability of spatial data” are considered some of the chief factors underpinning this phenomenal growth rate,while increasing occupational mobility levels are only expected to boost innovation for the market.
One specific fintech area that is expected to take off next year is “insuretech”—that’s technology that is helping to disrupt and optimise the various aspects of the insurance industry. Forbes, Victoria Treyger, managing director at Felicis Ventures, believes that insuretech will soon go mainstream. “We will see changes in how ‘insurance’ is sold where it becomes bundled with other home services, especially apartment rentals and home sales.… Businesses will see a sharp increase in all types of commercial insurance that they can buy directly online rather than through brokers.”
Elsewhere, payments, mobile banking, blockchain, artificial intelligence (AI) and regulatory technology (regtech) are all expected to be growth industries under the fintech banner in 2019.
What about cybersecurity?
As our lives shift further into the online world, the potential for criminals to compromise our privacy becomes ever greater. And the responsibility for such data breaches is invariably going to lie with the company whose site has been hacked, whether that be an e-commerce retailer, a health insurer or a social-media company. Not only will such companies have to pay substantial amounts in settlements of customer lawsuits for such criminal activity, they also stand to lose future revenue from the loss of confidence experienced by affected customers.
The threat itself is being executed in increasingly diverse forms, moreover. Viruses, spam, malware, identity fraud, hacking, phishing and cyberstalking are just some of the ways in which companies are now being attacked. Given that companies are having to take customer-data protection very seriously, therefore, cybersecurity is now being considered as mandatory in virtually every industry.
As a result, most analyses views cybersecurity taking off massively over the next few years. According to one recent market-research report published by MarketsandMarkets, the cybersecurity market is expected to grow from $152.71 billion in 2018 to $248.26 billion in 2023 at a compound annual growth rate of 10.2 percent during that period.
With the need to protect our privacy becoming ever more important, therefore, there doesn’t appear to be any slowdown on the horizon for the cybersecurity industry.
AI is the future!
Although we’ve not quite yet reached that dystopian phase of the machines taking over the world, we are undoubtedly witnessing a sharp rise in the number of successful AI applications being introduced as well as the amounts being spent on research in this field. Earlier this year, for example, the European Union (EU) announced that it will spend $24 billion in AI research by 2020 in a bid to keep pace with global leaders China and the US. Promising applications of the technology include autonomous cars, healthcare and financial services, not to mention its controversial use for military purposes.
Many of the world’s biggest companies are dramatically boosting their exposure to AI. Take Microsoft as an example. The US tech giant recently announced plans to acquire conver sational AI firm XOXCO, thus marking the fourth AI-related purchase Microsoft has made in 2018. The firm’s “bot framework” already supports more than 360,000 developers, and the acquisition of XOXCO will only further strengthen Microsoft’s AI credentials.
Other major companies have also moved strongly into the space. Facebook already uses AI extensively for facial recognition in images as well as for ordering posts in user newsfeeds according to relevance. Amazon uses AI for its Alexa-based applications such as Echo as well as in its leading cloud-computing service Amazon Web Services (AWS) through natural language processing (NLP), speech generation and image analysis. And Google has a strong AI presence, especially with respect to healthcare applications. According to CEO Sundar Pichai, “If AI can shape healthcare, it has to work through the regulations of healthcare. In fact, I see that as one of the biggest areas where the benefits will play out for the next 10 to 20 years.”
All this means that a bright future is being touted for AI, and adoption of the technology is now beginning to accelerate—although the industry is admittedly still in a very early stage of development. Nevertheless, a report from Narrative Science and the National Business Research Institute (NBRI) recently revealed that more than 60 percent of companies surveyed had already implemented AI and are actively seeking further ways to adopt it. Gartner Research, meanwhile, found that the global business value derived from AI hit a colossal $1.2 trillion in 2018, 70 percent more than the previous year. What’s more, it expects this value to reach $3.9 trillion by 2022.
And PwC (PricewaterhouseCoopers) predicts that AI will represent up to $15.7 trillion of global gross domestic product by 2030. As such, investing in AI now represents a sensible long-term decision.
Health care sector: there are enormous possibilities to invest within the health care sector. Over the last decade healthcare has done well and the trend will keep growing. Individual investors stand to profit massively because healthcare is the fastest growing sector. Over the last 10 years, health care has done well, in part because of demographics with an aging population. Even though it’s traditionally considered a defensive sector, health care also benefits from higher earnings growth.
Here is the time to take a look on one of the most popular health care’s sectors: Medical Cannabis.
October 17, 2018, was a momentous day in Canada when, following June’s Senate vote to legalise recreational use of cannabis, the country’s adult citizens were officially able to buy the controversial plant for recreational purposes. Investors can now expect to see strong gains in this new industry, one that generated $8.5 billion last year in the United States and which, according to Arcview Market Research and BDS Analytics, is forecast to grow to $23.4 billion by 2022 at a healthy 28-percent CAGR.
But, unlike the US, cannabis in Canada is now legal at the federal level, rather than just within individual states or provinces. As such, all eyes are on the Canadian market as we head into 2019. Recreational marijuana can now either be obtained from licensed producers or grown for one’s own consumption. Arcview and BDS expect recreational marijuana sales between October 17 and the end of 2018 to hit almost $700 million and to reach nearly $5 billion by 2022.
And with more states in the US potentially legalizing recreational cannabis use during the coming years, both North American countries represent strong investment potential over the next few years.
This vastly expanding industry is concerned with the technology underpinning the design, manufacturing and application of robots—that is, devices that can perform tasks without the need for human assistance. Not to be confused with artificial intelligence (AI), which refers to developing computer programs to complete tasks that would otherwise require human intelligence, robotics is more concerned with performing a series of actions autonomously (and, therefore, is less concerned with being required to “think”).
And many now believe that the age of robots will soon be upon us. Indeed, the robot revolution is expected by some to completely transform the global economy over the next couple of decades. According to a recent report from Mordor Intelligence, the global robotics market is expected to notch up a CAGR of 24.52 percent over the forecast period of 2018 to 2023. Perhaps unsurprisingly, the need for automation across a vast number of industries will drive this growth, with the report particularly highlighting the rise of smart factory systems as already being crucial in boosting demand for robots.
The automotive industry is expected to account for the biggest market share for robotics, with Mordor noting that “rising concerns for labour safety, adoption of automation to ensure quality production and to meet market demand on time” will be the main drivers of automotive-robotics market growth.
As you can clearly see the world is open for new industries using the latest solutions. Even when we are talking about finances or health care we can see that technology has been simultaneously implemented. Those solutions help us to develop the industries we know giving them the new breath. They help us to open our eyes and notice the aspects which couple years ago were absolutely out of reach. Fintech, Blockchain Technology, Cybersecurity, Medical Cannabis, Robotics – those are the future whether you agree or not .