With all eyes firmly on the upcoming U.S. election, the pandemic-stricken markets could be facing some early November volatility. In the long term, the best-quality stocks are likely to recover. However, some huge value opportunities could very well be just around the corner. Instead of fretting, investors should be making a wish list, determining entry points, and looking to go long on beaten-up quality.
Space is the “next big thing” in growth stocks
Growth trends have been big this year, despite the destructive market forces unleashed by the pandemic and its mix of economic uncertainties. Tech stocks have been galloping, with a rash of IPOs hitting the exchanges. Green power remains one of the biggest growth trends worldwide. This year has also seen gold attracting momentum investors, while cannabis stocks have also seen some interest.
The biggest growth trend, though, could be yet to come. And its source is literally all around us. Space investing takes in everything from orbital comms to the potential for offworld mining. Investment theses are slow to catch up, though. Some obvious choices do exist, though, spearheaded by Maxar Technologies (TSX:MAXR)(NYSE:MAXR), up 6% at the start of the week.
Then again, investors can opt for the delightfully tickered Procure Space ETF (NASDAQ:UFO). This ETF contains both aforementioned stocks. Also covering a range of aerospace and communications companies, Procure Space is a solid choice for tech investors looking to make a move into the “next big thing.”
One thing may let down Procure Space, though, and that’s the comms aspect. Procure Space packs a lot of comms exposure, arguably making it a little trendy. 5G is attracting a lot of interest, and could generate big momentum. However, investors should be wary of overhyped trends in the current economic climate. Tech stocks have faced several extreme bouts of investor backlash this year. The last thing anybody needs is another bubble.
Avoid bubbles, diversify, and go super long
Of course, if 5G investing does float your boat, Procure Space should be on your list for this very reason. Space investing purists may want to go for something a little less diluted, though. For instance, the Trump administration has been pushing NASA initiatives, making partnered names like Maxar Technologies a strong play for exploration-focused upside.
Of course, investors going super-long may want to pack some power generation and commodities, too – sectors that could prove adjacent to the space industry. For these segments of a “big sky” portfolio, consider Northland Power and Lundin Mining, respectively. These are likewise diversified names. Northland covers a wide range of renewables exposure, from solar to wind farming.
Lundin is just as varied in its metals exposure, packing access to copper, zinc, nickel, and gold. These last two stocks are dividend-paying names with plenty of quality indicators. Their yields are moderate, with Lundin paying a 2% dividend, and 2.7%. However, if the markets take a tumble in a couple of weeks, they will be on sale along with the rest of the TSX. And that could mean bigger yields and better value for money.
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5G is one of the greatest arrivals in technology since the birth of the internet. We could see plenty of new wealth-building opportunities in 2020 that would potentially dwarf any that came before them.
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Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool recommends MAXAR TECHNOLOGIES LTD.