Last weekend, Donald Trump's presidential campaign put out a 312-word press release.
In it, Trump economic advisor Peter Navarro says that major media organizations are becoming Standard Oil-style "trusts." Further, Navarro says that Trump would "break up the new media conglomerate oligopolies that have gained enormous control over our information, intrude into our personal lives, and in this election, are attempting to unduly influence America's political process."
Trump sent out this message as a response to AT&T Inc. (NYSE: T) announcing plans to buy Time Warner Inc. (NYSE: TWX) for more than $85 billion. He doesn't like that deal much.
"AT&T, the original and abusive 'Ma Bell' telephone monopoly, is now trying to buy Time Warner," Navarro wrote. "Donald Trump would never approve such a deal because it concentrates too much power in the hands of the too and powerful few."
It's a somewhat surprising anti-business stance, as it puts Trump in company with the likes of U.S. Sen. Bernie Sanders.
But that's where we find ourselves this year...
Whether you're in favor of the AT&T merger or not, I know you're looking at it as a possible profit opportunity. You're a tech investor - that's how you think.
I want you to stop right there.
M&A deals like the proposed AT&T-Time Warner merger can help these companies beat their competition - and boost their share prices.
That's obviously good news for investors - if they're already "in." However, you're likely not "in" this one.
But I have a "workaround" around this problem. It will help you boost your earnings via tech sector M&A... and you won't have to get "in" early.
Take a look...
Pending regulatory approval, the AT&T-Time Warner merger would be one of the largest media mergers of all time. But it's also a marriage between two very different companies...
It's a move that makes sense, especially in the world of streaming video, the preferred content platform by mobile users nationwide: a content company pairing with a mobile distribution network.
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Despite concerns about the deal from lawmakers and consumer advocates, investors liked the deal - sending Time Warner shares up 19% following the merger's announcement.
That would have been nice...
But it's extremely difficult to predict such deals and time your "Buys" to take advantage of them.
Who knows what company is going to buy what when? Not I - not all the time... and I spend my days studying this stuff.
But there is a way to get in on such M&A deals - the next time one comes around - without any guesswork at all...
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Around the world, bankers have been keeping busy helping firms tie the knot. Thus far in 2016, we've seen well over $2 trillion worth of deal announcements, with more than 40% of that action taking place here in the United States.
And as is the case in most years, the tech sector leads the way.
According to Dealogic, global technology acquisitions thus far in 2016 have surpassed $400 billion, up 27% from the same period last year. We're within striking distance of the all-time record set last year.
Simply put, this M&A tech frenzy won't go away any time soon. It's been a key theme for investors going back since 2000, and it will remain a key theme in coming decades as long as young, innovative firms pioneer new technologies that the big firms must control.
That's why I think tech investors ought to own the Technology Select SPDR ETF (NYSE: XLK). Now, XLK is not focused on M&A.
Instead, it covers the entire tech sector - and so this exchange-traded fund (ETF) benefits from both buyouts and all the other lucrative tech trends out there.
XLK wisely avoids focusing on just one area of tech. The portfolio has stakes in the top firms in the S&P 500 in areas like hardware, storage, telecom equipment and services, cloud computing, semiconductors, mobile software, and internet software and services.
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In this $13.21 billion fund, you'll find AT&T. As XLK's sixth-largest holding, it makes up 5.17% of the fund.
In it, you'll also find many of the firms involved in 2016's biggest tech deals: Microsoft Corp. (Nasdaq: MSFT), Oracle Corp. (NYSE: ORCL), Analog Devices Inc. (Nasdaq: ADI), and Linear Technology Corp. (Nasdaq: LLTC) are all there. And so are many other leading tech firms, including its largest holdings, Apple Inc. (Nasdaq: AAPL) (14.1% of the fund) and Intel Corp. (Nasdaq: INTC) (with a weighting of 3.7%).
While this fund gives us broad and deep exposure to key tech niches, so do many of the firms in the fund themselves. They've built solid growth platforms from scratch, aided by a steady slate of acquisitions.
As you can see, M&A is great news for buyers, sellers - and investors. It's a clear path to growth for many firms, especially those that do it right.
And XLK is a great way to play this trend. At the same time, you also profit from the fast growth and high profit margins the tech industry always provides.
Trading at just $48, this is a well-run ETF. It has a cost ratio of just 0.15% and a four-star rating from Morningstar - meaning it meets all three tests in our ETF Profit Screen.
Plus, you get a solid track record with this broad-based ETF. Over the past two years, XLK has gained 26.9%. Over the same period, the S&P 500 is up just 12.5%.
In other words, XLK will give your portfolio much more than just a solid base.
It will benefit from both the tech sector's organic and M&A growth for years to come - and offer a stable, cost-effective vehicle that's tough to beat.
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