The first cybersecurity profit alert was in early February. That's when President Obama requested $14 billion in his 2016 fiscal-year budget for increased cyber defense. Roughly $5.5 billion of that is requested just for the Pentagon.
The second came just last week, when President Obama spoke at the first ever White House Summit on Cybersecurity.
"In recent breaches, more than 100 million Americans had their personal data compromised, including, in some cases, credit card information," President Obama told a room full of leaders from Congress, law enforcement, and the tech industry.
The White House's commitment to cyber defense means billions of dollars will start to pour into cybersecurity companies - which is huge news for investors.
"The money spent on cyber defense represents one of the highest profit potentials of anything I've encountered," Money Morning's Small-Cap Investing Specialist Sid Riggs said. "And the growth numbers spotlight not just one company but an entire sector that will have the wind at its back for the rest of our investing lifetimes."
The reason for the government's cybersecurity push is the staggering amount of money spent preventing and responding to cyber threats every year...
IBM Corp. (NYSE: IBM) claims its client companies are attacked 16,856 times per year on average
And it isn't just tech firms that are targeted. Every industry is under attack:
"More than $95 billion will get spent this year alone trying to prevent the inevitable assault on your private information and confidential records," Riggs told his Money Map Report readers in February.
By 2019 cybersecurity spending will reach $155.74 billion, according to market research firm MarketsandMarkets. That's a 63% growth rate.
And the problem isn't isolated to the United States - it reaches every corner of the globe.
According to McAffee Inc., cybercrime costs the global economy more than $575 billion per year...
"That's more than 3% of America's 2014 GDP, and it's creating a lot of pent-up demand from countries, companies, and individuals determined to protect themselves," Riggs said.
That's why the cybersecurity field will see a pickup in profits. The best way to start investing in cybersecurity stocks in 2015 is to take this balanced approach...
Instead of trying to pick just one cybersecurity stock to buy today, you can profit from the entire industry's growth with the sector's new exchange-traded fund (ETF).
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The PureFunds ISE Cyber Security ETF (NYSE: HACK) began trading Wednesday, Nov. 12. Since then, it's up 15%. That compares to a gain of just 2.5% for the Dow over the same period.
HACK gives investors a piece of 30 sector leaders at once.
"One of the things I really like about HACK is its industry-specific diversity," Riggs said. "HACK is most heavily invested in the systems software industry, which will prove to be a great stabilizing force for the fund. That's the sphere of the IT sector that's been growing most reliably since 2010, with the consulting firm Gartner Inc. already forecasting enterprise software to grow by 7.3% in 2015."
Roughly 75% of its holdings are U.S. companies. They include major stocks like:
"The average weighting of each of the companies in HACK is 3.22%, which means the fund shouldn't get dragged down by the stumbles of any one investment," Riggs continued.
HACK has $234 million in total assets and opened today at $28.66.
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