Recover in Style with the Best ETFs to Buy Now

Earlier this week, I promised you I'd be back with "three hand-selected investments that you can buy now to lead you out of" the sell-off we've been seeing over the past week or so.

Today, I'm keeping that promise.

But first, a quick story.

At a cocktail party the other night, my friend Dave pulled me aside and sheepishly admitted that he has sat out one of the best generational bull markets for tech we've ever seen.

When it comes to building their net worth, a lot of folks are like Dave.

For him, it wasn't for lack of interest. It's just, in his late 50s, he's been focused on getting his kids through private high school and college.

Now that funds are starting to free up, he wanted my opinion on how to get back into the market.

Like my mother-in-law often says, "No shame, no blame."

So instead of chiding him, I told him the same thing I tell all new investors – and folks looking to get restarted after a sell-off: You should start with exchange-traded funds (ETFs), and you should make sure you have solid exposure to technology and the life sciences.

While it may sound simple in theory, putting that into practice can be confusing. That's because there are now some 2,000 ETFs comprising more than $4 trillion in assets under management.

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With that in mind, today I'm going to share three of my favorite ETFs.

All three of them roughly doubled the market over the past year.

And all three could do it again in the next year...

From Zero to Thousands in 25 Years

It's easy to forget just how big a deal ETFs have become. Fact is, this very popular investment vehicle didn't even exist until January 1993.

But the launch of the SPDR S&P 500 ETF (NYSE: SPY) was a game changer. It gave retail investors a way to play the benchmark S&P 500 with very little money to start with and an expense ratio approaching "free" – a mere 0.09%.

(A low expense ratio is one of the three ETF Profit Screens we use when searching for funds to buy.)

No wonder ETFs have become so popular, growing at nearly 19% a year. And there's plenty of growth ahead. The sector could be worth $20 trillion by 2027 – up from $4.57 trillion at the end of 2017.

Here at Strategic Tech Investor, we are big believers in starting with ETFs – and then adding great stocks down the road.

Here's the thing: With so many choices, it can be daunting for those who are just getting started.

With that in mind, I want to take a moment to show you three that I think are great for building wealth.

Take a look...

Sell-Off Recovery Tech ETF No. 1: The FANGs – and More

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I've recommended the iShares North American Tech ETF (NYSE: IGM) several times over the past three years. That's because IGM covers all the big leaders in tech, a group that has been a big factor in the market's rally over the past year.

We're talking firms like Facebook Inc. (Nasdaq: FB), Apple Inc. (Nasdaq: AAPL), Microsoft Corp. (Nasdaq: MSFT), and Amazon.com Inc. (Nasdaq: AMZN). Together, those four firms make up around 30% of IGM's holdings.

These firms have used their size to outgun smaller rivals, and each has spread its wings into the fastest growth areas of tech. While many of the firms in IGM have done a great job reaching into global markets, they all count on North America as their major source of strength.

You can't blame them. Since the 1960s, Silicon Valley has ushered in wave after wave of tech breakthroughs, from chips and personal computers to smartphones and cloud computing. It's also one the main reasons why the United States boasts the world's largest economy.

And there's plenty of breadth here as well. Holding some 295 stocks, IGM trades at roughly $210. It has a 0.46% expense ratio. Over the past year, it has gained 34.2%, more than doubling the return of the S&P.

Sell-Off Recovery Tech ETF No. 2: Aiming for the Sky – and Beyond

Once you have broad exposure to tech, it's time to start shopping for very profitable niches. And you just can't go wrong with the red-hot trend of cloud computing.

Throughout the world, hundreds of thousands of companies are seeing the value of migrating their key data and services away from local servers and onto the Internet backbone, boosting access for both staff and clients to key programs and files.

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Gartner Group says that $111 billion in tech spending was earmarked for the cloud in 2016, and that number could hit $216 billion by 2020. Statista adds that cloud computing has grown at a 16% yearly clip in the past five years.

So, the First Trust Cloud Computing ETF (NYSE: SKYY) is clearly after a massive market. This fund focuses on firms that are providing cloud-focused hardware and software, like Amazon and NetApp Inc. (Nasdaq: NTAP). But it also includes firms that use the cloud to deliver services, such as Netflix.com Inc. (Nasdaq: NFLX).

Trading at $56.50, it has a 0.60% expense ratio. Over the past year, the fund gained 37% and has averaged profits of 20% over the past five years.

Sell-Off Recovery Tech ETF No. 3: The Healthy Choice

Few sectors have been as greatly transformed by tech as the medical sector. Data sharing in the cloud, more efficient software, and major advances in drug research – none of it happens without Silicon Valley-style innovation. Yet it's in medical devices that you'll see some of the most profound changes taking place.

A lot of that innovation is taking place right here in the United States, which accounts for 40% of the global $156 billion medical device market, according to Select USA.

The best way to play this massive and growing corner of the economy is the iShares U.S. Medical Devices ETF (NYSE: IHI). Fully 60% of this portfolio is anchored by 10 of the world's most innovative device makers, including Medtronic Plc. (NYSE: MDT), Abbott Laboratories (NYSE: ABT), and Boston Scientific Corp. (NYSE: BSX).

Trading at $226, the fund charges a 0.43% expense ratio and has delivered roughly 20% annual returns, both in the past year as well as over the past five years.

And when you consider that dozens of countries are home to rapidly aging populations, you can be sure that demand for medical devices will keep growing at a strong clip.

In other words, these three funds make sure you have the tech bases covered. So you don't need to choose a favorite.

Each captures a crucial corner of the tech market, from the biggest players to the smaller, nimbler players, to the most dynamic growth sectors within tech.

Owning these funds is a great way to start an investing action plan with three foundational plays you can hold for years.

That means that folks like my friend Dave can hold them for years to come, knowing the ETFs will help them steadily build their net worth.

Now Dave, at that same party, also asked me for the "inside scoop" on today's single hottest investing trend – legal cannabis. He knows that I've been on that "beat" for years... and figured I had some top picks.

And I helped him out there – just like I'm about to help you out right here...

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On Tuesday, Oct. 23, two leaders of America’s cannabis revolution have agreed to take you deep inside our nation’s most controversial – most misunderstood – and what’s quickly becoming our most lucrative industry.

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The post Recover in Style With These Three Market-Doubling ETFs appeared first on Strategic Tech Investor | Michael A. Robinson.

About the Author

Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...

  • He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
  • He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
  • As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.

This all means the entire world is constantly seeking Michael's insight.

In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.

Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.

And even with decades of experience, Michael believes there has never been a moment in time quite like this.

Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.

To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.

His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.

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