As we enter the holiday season, folks are talking about the annual “Santa Claus rally” in the market.
But do you know about the “early January effect?” Historically, small- and mid-cap stocks tend to outperform large-cap stocks in November and December, as well as into the New Year. This occurs when yearend pension funding, annual gift-giving and other seasonal buying pressure drives small- and mid-cap stocks higher between November and April.
As I mentioned in yesterday’s article, high-quality small-caps are a key component of my strategy to How to Make 2020 Your Record-Breaking Year. In this series, we’re going to cover the best strategies to make this your most profitable year yet.
Even during bull market conditions investors get mediocre returns — again and again. In more than 30 years of investing, I’ve seen it happen many times. But as I will explain, 2020 will be year of tremendous growth, and you can beat the market for even bigger gains with the right investing strategy.
Whether its maximizing yield, achieving a retirement catch up or finding the small stocks set for life-changing gains, this series will explain your path to leaving so-so market gains in the dust.
In today’s article, we’re going to look at another bucket of stocks that has been leading the stock market higher recently: technology — and, especially, the move to 5G.
I want everyone to understand that 5G is much more than a smartphone upgrade for faster download speeds. That tends to be how it’s discussed…but the implications are much larger.
For example, we’re trending towards an entire “Internet of Things” with devices like the Amazon Echo. You want to turn on the lights without hitting the switch? Just plug in a “smart” light bulb, connect it to your phone and then any time you want your lights on our off, just say, “Alexa, lights on,” and voila! — you have light.
The Internet of Things has been slowly integrating itself into our lives for some time now: not only the Amazon Echo, but Nest thermostat, smart microwaves, wearables like the FitBit and the Apple Watch…and many, many more to come. Then, once 5G is incorporated, your smart device data will be gathered, analyzed and managed at a higher degree.
Gartner predicts that by 2020, there will be 25 billion smart devices. By 2021, the total market is estimated to be worth a whopping $520 billion, which is double from the $236 billion in 2017, according to Bain. So, clearly, there’s a lot of room for growth — and all of it is facilitated by the giant leap forward that 5G represents.
No wonder The Wall Street Journal recently had a great article titled: “U.S. Government Is Tripping over Itself in Race to Dominate 5G Technology.” Essentially, the speed of 5G networks depends on the radio spectrum licensed by the Federal Communications Commission (FCC). You may be familiar with 2.4 and 5 GHZ licensed to Wi-Fi networks that send signals over “long waves” to penetrate walls and glass. However, the really fast networks, like 5G, require “shorter waves” that need “repeaters” everywhere, since they cannot easily penetrate walls and glass.
The desired 2.4 GHz network for 5G providers is receiving objections from the Commerce Department, NASA and NOAA over fear of weather satellite interference. In addition, the Wi-Fi industry is now lobbying for faster and additional radio spectrums to speed up the next generation of Wi-Fi devices. Complicating matters further, utilities and the Defense Department have their own radio spectrums licensed by the FCC.
We also need to consider that the U.S. is very spread out, geographically, so the domestic 5G providers are operating on a longer wave radio spectrum that can travel longer. In China, on the other hand, the 5G networks are able to utilize the shorter wave radio spectrum. As a result, the 5G networks in China, Japan, Singapore, South Korea and Taiwan are expected to be a lot faster than the U.S.’s 5G network.
In the U.S., satellite networks are utilizing the shorter wave radio spectrum to broadcast television signals and are obsessed with fast speed due to 4K programming. All those devices in your home that increasingly require faster Wi-Fi, as well as your 4K television, are fighting with the FCC for more space on the radio spectrum. Naturally, the FCC will grant new licenses that will force you to continue to upgrade your devices for faster Wi-Fi networks and 5G access.
As investors, I’m much more interested in the companies facilitating 5G than any one company who needs it. And network equipment, especially fiber optics, is instrumental to the big telecoms deploying 5G. T
That’s what Ciena Corporation (CIEN) brings to the table. Ciena is a networking systems, services and software company that partners with 85% of the world’s largest telecommunications providers. That includes Verizon (VZ), AT&T (T), Vodafone (VOD), Sprint (S), Comcast (CMCSA), NASA, NOAA and Samsung. And it strives to help its more than 1,500 clients better adapt to changing technology and environments to ensure better connected experiences.
For the third quarter, Ciena reported 51.1% annual revenue growth and 47.9% annual adjusted earnings per share growth. And the company topped analysts’ earnings estimates by 24.6%. For the fourth quarter, which will be announced on December 12, analysts are expecting 18.9% annual earnings growth and 7.2% annual sales growth.
And, since 5G is such a massive undertaking, I recommend owning a few other stocks in this space as well. In fact, I put together an entire special report on this investment opportunity, titled The #1 Investment for the Coming 5G Revolution— and many more besides, like:
- Thrive in Market Sell-Offs…
- Create Your Own Million-Dollar Retirement Plan…
- Get Paid Up to 4 Times a Month…
Through my Platinum Growth Club, you also get access to the most powerful wealth-building blueprint I’ve ever created and have the opportunity to make the most money possible during this next big market move.
P.S. In case you haven’t heard, I’ve just released my brand-new 2020 forecast. I’m as sure about what comes next for this market as I have been about anything in my 35 years of investing.
My research shows that a rare combination of extremely powerful forces will send the market soaring to Dow 40,000 in the new year.
Now I know you might be skeptical. And I understand how you feel. This isn’t the first time the noise and the fearmongering in the financial media have tried to scare people out of the market.
But time and again, the market has just kept going up and up and up. And through it all I’ve shown my readers model portfolio gains of 457%, 751%, even 1,125%.
Look, I’ll be the first to tell you when I think the party is over. But right now, the last place you want to be is on the sidelines.
Missing this Great Market Melt Up to Dow 40,000 in the months ahead would be a devastating mistake. So I’ve posted my full forecast for you here. See my research for yourself and get the simple steps you can take right now to prepare for the massive market move ahead.