9 Investments That Will be the Most Valuable in the Future

No one can ever be certain of what the future will bring. However, we can get a very good picture of what the future holds by studying past events and recent trends. We can then leverage the data to guide our long-term investment decisions.

Unfortunately, this is easier said than done. With the vast amount of available information, it can be a herculean task to find data that can help you take your investments to the next level. The good news is that we’re here to help you with that.

We scoured the internet in our quest to find data that can help us derive what the future might bring. In this article, we reveal the nine assets that will be the most valuable in the future.

Bitcoin

If you’re an everyday investor looking to boost your net worth in a relatively short period of time, Bitcoin may be your best bet (BTC/USD). Bitcoin is down by around 80% from the bull market where prices were as high as $20,000 in December 2017.  The asset may have plummeted big time but it is showing signs of recovery. When it recovers, it can deliver gains that can exponentially explode your wealth.

A Fundsrat research reveals that since 2010, Bitcoin bull runs have given investors returns between 5,343% and 59,100%. Looking at this trend, Fundstrat predicts that the next bull run will deliver gains of up to 56,000%.

Bitcoin bull market gains

Source: MarketWatch

Even if you take the lowest end of the range, gains of over 5,300% in the next few years is very likely to surpass the growth rate of any investment asset out there. This is why Bitcoin is number one on our list of assets that will be the most valuable in the future.  

Security Tokens

Number two on our list climbs on the back of our top asset.

Security tokens are cryptographic tokens that can perform the functions of a security, such as disburse dividends, allocate shares, pay interests and so on. In other words, they are financial securities in the form of digital assets. They are attractive to investors because they represent stakes in the business or the project and they are regulated. This means that projects offering security tokens will be under the jurisdiction of the Securities and Exchange Commissions, so scam projects will not be an issue.

Experts and insiders know that security token offerings (STOs) are simply regulated and rebranded initial coin offerings (ICOs). That’s why STOs are called the next generation of ICOs. With this knowledge, we can use ICO trends to forecast STO performance in the next few years.

If we look at the trend of ICOs, the market exploded from $30.4 million in 2014 to $13.9 billion in 2018. That’s a mind-blowing funding growth of 45,623.68% in four years!

ICO explosion

Source: HowMuch.net

Experts strongly believe the torch will be passed on to security tokens. In a few years, it is predicted the STOs will have a market cap of $10 trillion. While this is a high number that may be hard to believe, a few successful STOs could take your net worth to the moon.

Aerospace and Defense Stocks

Those who are risk averse can stick to assets that offer substantial rewards with limited risks. One of the best investments to make in this asset type is aerospace and defense stocks. Since 2013, the industry has significantly outperformed S&P 500 based on total returns.

A&D vs. SPX

Source: TopForeignStocks

If you notice, the gap has widened over time. Further research reveals that this trend will continue in the next two decades. In 20 years, returns with dividends reinvested in the aerospace and defense companies may yield an estimated growth of 924%. On the other hand, the same investment strategy in the S&P 500 will only likely deliver an estimated growth of 312%.

20-year investment horizon

Source: MarketWatch

This asset type provides tremendous growth potential while offering stability at the same time. This is why aerospace and defense stocks like Lockheed Martin (LMT), Northrop Grumman (NOC), and Raytheon (RTN) will likely be one of most valuable assets in the future.

Stocks of Gaming Companies

The video game industry is booming, yet not a lot of people are taking notice. Back in 2012, the entire industry was worth $70.68 billion. By 2021, the global games market will likely grow to $180.1 billion. That’s a growth of over 154% in less than 10 years.

Growth of the global games market

Source: VentureBeat

If you’re not impressed with these numbers, just take a look at how shares of video game companies have performed in the last five years. If you invested in Activision Blizzard (ATVI), Electronic Arts (EA), Take-Two (TTWO), or Ubisoft (UBSFY) in 2013, your capital would have grown by anywhere between 304% and 619% by 2018.

Growth gaming stocks

Source: Fool

Research tells us that this trend will continue. The emergence of mobile gaming, augmented reality, and virtual reality can only enhance the growth prospects of the industry. On top of that, e-sports is gathering a substantial following. We won’t be surprised if gaming gives birth to a new industry.

Renewable Energy Stocks  

The world has a growing appetite for energy. According to the International Energy Agency, global energy demand will grow by 25% in next 20 years. In other words, a staggering $2 trillion investment per year is required to meet energy demands from now up to 2040. Ideally, the new energy supply will have limited impact on the environment.

The good news is that a huge percentage of the $2 trillion annual investment will find their way to renewable energy companies. Based on a recent report by McKinsey and Company, 77% of new global electrical generation capacity from now up to 2050 will be sourced from wind and solar. This means that investments in wind and solar energy is bound to grow exponentially in the next two decades.

If you find that hard to believe, just look at the historical performance of investments in wind solar energy. Fifteen years ago, investments in the renewable energy industry were valued at a few billion dollars. In 2015, it surpassed $2 trillion.

Growth of wind and solar energy

Source: Saskwind

The past and the future are saying the same thing. Stocks with exposure in renewable energy such as Brookfield Renewable Partners (BEP), Terraform Power (TERP), and NextEra Energy (NEE) will likely be some of the most valuable assets in the future.

Natural Gas

Another asset that will benefit from our growing energy requirements is natural gas. Although it will compete against solar and wind energy, it will serve as a complement to help meet energy needs while decreasing carbon emissions.

China, in particular, has tremendous demand for natural gas. The country is motivated to move away from coal to natural gas and other clean energy sources to power its growing economy. Thus, China’s need for the commodity is expected to grow by 200% in 2040.

What’s interesting is that demand for the commodity is yet to reflect on the price. A look at the monthly chart of natural gas (NATGASUSD) shows that the commodity has been on a decade long bear market. However, this will likely change soon because natural gas is likely bottoming out.

Natural Gas accumulation

Technical analysis shows that natural gas is currently in range accumulation as it trades between $2.19 and $4.9. It looks ready to breakout within the next year and target $8. If the read is correct, that’s a growth of over 260% in the next few years.

Stocks of Companies With Exposure to Artificial Intelligence  

Artificial intelligence (AI) is touted as the catalyst that will drive the next technological revolution. It appears that VC firms agree to this assertion. VC investment in AI has significantly expanded over the last several years from $1 billion in 2012 to $5 billion in 2017. That’s a growth of 400% in five years.

Growth of VC Investment in AI

Source: Datanami

Are venture capitalists only succumbing to the AI bubble? We don’t think so. According to Tratica Research, the AI software market is projected to grow from $11 billion today to $90 billion in 2025. That’s a growth rate of 119% per year in the next six years.

Growth of AI revenue

Source: Priceonomics

Thus, shares of companies with direct exposure to AI such as Nvidia (NVDA), Alphabet (GOOGL), Twilio (TWLO), and Amazon (AMZN) may become very valuable in the future.  

Shares of Space Industry Companies

Piggybacking on the growth and development of the aerospace and defense subsector is the space industry.

A Morgan and Stanley report predicts that the entire space economy could be worth a whopping $1.1 trillion by 2040. Currently, the space industry is valued at $350 billion. This means that the industry can grow by over 214% in the next two decades. Take note, this estimate does not take into account asteroid mining. Thus, this growth estimate in the next 20 years may be conservative.

Unfortunately, companies at the forefront of the space industry are mostly private companies. Elon Musk’s SpaceX is valued at $30.5 billion while Richard Branson’s Virgin Galactic and Jeff Bezos’s Blue Origin have recently received fundings of $1 billion. These three companies have yet to think about an initial public offering. When they finally go public, shares of these companies will likely be one of the most valuable assets in the future.

Gold

Gold (XAU/USD) made this list not because it has tremendous growth potential in the next decade or so. We decided to include Gold as a hedge against a possible bear market and recession.

The S&P 500 (SPX) is starting to show signs of weakness. On top of that, an inverted yield curve may be a signalling that the stock market has already topped up. If a bear market is indeed on the horizon, capital will likely take flight into assets that are considered safe, such as Gold. This is considered conventional wisdom but does it actually hold? We looked at historical data for evidence.

In six out of the eight SPX crashes in the last forty years, the price of Gold rose. This supports the assumption that Gold remains a reliable store of value during economic downturns.

SPX vs. gold

Source: GoldSilver.com

Therefore, smart investors should always consider exposure to gold to protect their assets against market crashes. If a big recession hits us, then gold might be one of the most valuable assets in the future.

Bottom Line

There’s no saying for certain what the future will bring. This is why we look at historical data and trends to prepare and possibly take advantage of what can possibly come. Data tells us that your future looks bright if you invest in some of the assets on this list.

 

Featured image courtesy of Shutterstock.

Disclaimer: The writer does not own shares of stocks discussed. He does own ETFs that may hold some of the stocks mentioned. These include GAMR, BLCN, and ROBO. He also holds a gold focused ETF; MNT.TO.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.
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