With so many companies in the stock universe, it is often challenging to find the perfect company for your portfolio. This is where a top-down approach comes in handy. The top-down approach involves finding an industry that is on the rise and looking for companies within that industry.
Investing in well-managed companies that have strong industry tailwinds can compound an investor’s returns. With that said, here are two industries that look set to thrive in 2019 and beyond.
While we have been hearing about artificial intelligence for years, we haven’t seen much application until just last year.
In fact, the application of Artificial Intelligence has unwittingly seeped into our everyday life. Google photos, for instance, uses AI to automatically identify you and your friends on images. Google translate is now much more effective in identifying languages. On the medical front, IBM (NYSE: IBM) is using artificial intelligence to read X-rays, while a computer can now identify early warning signs of diabetic retinopathy, a disease that can cause blindness.
All of these developments are coming about due to the faster central processing units (CPUs) that are powering deep learning. The proliferation of big data has also been a key reason why more companies are able to train AI through deep learning.
2019 will certainly be another exciting year for AI and how it can be applied to our daily lives. Companies that are at the forefront of the technology include Alphabet Inc (NASDAQ: GOOGL), Facebook Inc. (NASDAQ: FB), and Nvidia Corporation (NASDAQ: NVDA).
Fintech, a portmanteau for “financial technology”, is the application of technology to improve traditional financial services. This can refer to simple applications such as online payments to more sophisticated applications such as automating corporate accounting tasks or using artificial intelligence to personalise an investment portfolio for clients.
With the explosion of the Internet, companies now rely heavily on technology to serve their financial needs for businesses and customers.
According to a survey by PWC, 49% of consumers now conduct their banking primarily on their desktop or smartphone. Consequently, the number of bank branches in the US has shrunk by 8% from its peak and analysts are expecting the number to fall by 20% through 2027.
In 2017, Singapore achieved a record high of US$229.1 million of fintech funding last year, with the government planning a target of 1,000 net jobs in fintech created annually.
With the pace of digitalisation not slowing down, Fintech is set to continue growing in 2019 and beyond.
Companies that are driving the revolution include China tech giants Alibaba Group Holding Ltd(NYSE: BABA), Tencent Holding (OTCMKTS: TCEHY), Online payment portal, Paypal Holdings Inc (NASDAQ: PYPL) and mobile payments company, Square Inc (NYSE: SQ), just to name a few.
Worried about the overall state of the market? Do you know the 1 thing you should never do in the stock market? The Motley Fool Singapore’s new e-book lays out a plan to handle market crashes, details the greatest advantage you have as an investor, and looks at decades worth of market data to bring you the smartest insights on investing. You can download the full e-book FREE of charge—Simply click here now to claim your copy
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Jeremy Chia owns shares in NVIDIA Corporation, Alibaba Group Holding Ltd, Alphabet Inc Class C, Facebook, Inc. and Tencent Holdings Ltd. The Motley Fool Singapore has buy recommendations for NVIDIA Corporation, Tencent Holdings Ltd, Facebook, Alphabet and Square.