Saagar Gupta, Fund Manager at SG3, Discusses Sectors to Watch

This blog post does not contain investing advice in any form. If you are interested in the topics discussed throughout this article, please speak with your trusted financial planner and formulate a plan that works best for you.

In spite of its many ups and downs, 2017 was a hallmark year for innovation. It was the year cryptocurrency rose to popularity; the purpose of artificial intelligence was clarified and largely embraced, despite critics’ claims that robots would soon replace the common worker; and the Internet of Things (IoT) took the world by storm, especially as consumers began integrating devices like Amazon Echo and Google Home into their everyday lives.

Given these factors, and our economy’s consistently stellar performance, it should come as no surprise that certain stock market sectors are projected to grow rapidly in the coming year. To elaborate, let us take a closer look at three industries everyone should be watching in 2018.

Technology

As previously noted, the technology sector made great leaps and bounds over the past year, thanks to the buzz Facebook, Apple, Amazon, Netflix, and Google — otherwise known as FAANG — generated with their various updates and new releases.

Although the industry has already been met with great success, some experts anticipate it will continue to rally and grow. However, these projections have not been based on major companies’ performances alone. Instead, it is believed that this sector will continue to thrive because of lesser-known companies and startups find their footing — and funding — in the coming year.

Financials

This year brought unprecedented growth to the financial sector. This trend was fueled mostly by the new administration’s rollbacks, the Federal Reserve rate hikes, and supporting loan demand. Furthermore, consumer and corporate balance sheets are in better shape now than they were prior to the economic downturn in 2008, leaving both consumers and financial professionals feeling confident that the financial crisis is finally over.

With the DOW closing in on the 25,000 mark and the market seeing a much-needed decrease in volatility, it should come as no surprise that some believe the outlook for 2018 is positive. After all, the economy has proven it is capable of adjusting to an ever-changing environment, so experts are waiting with bated breath, and hoping to see continued success the coming year.

Biotech

While other sectors saw tremendous growth and promise in 2017, it seems as though biotech lagged as a sector, in spite of experts’ high hopes at the beginning of the year. Concerns began to arise this past summer, when the industry’s exchange-traded fund (ETF) got dangerously close to breaking below its moving average. Although it swiftly rebounded, the sector came tumbling down once more, finally breaking below the moving average in early December.

However, hope may not be entirely lost for the biotech sector. With the risk of drug price increases subsiding and the industry moving toward becoming self-regulated, investors’ concern is slowly turning into optimism, with some going as far as stating, “Biotechs will go into 2018 with the wind in its sails, rather than an albatross around its neck like 2017 began.”

Although it may be tempting to invest in the aforementioned sectors now, only time will tell just how each of them will perform in the new year. Regardless of the so-called predictions you are bound to hear, it would be beneficial for you to consult a trusted financial professional before investing your time or money in any of these industries.

Saagar Gupta is a fund manager and founding partner of SG3 Capital, a small, private investment fund based in sunny Dorado, Puerto Rico. An MIT graduate, Saagar discovered his affinity for finance as he interned for Ascend Capital, well before he even began his college career. This experience influenced him greatly, pushing him to seek more insight on managing capital and helping individuals achieve their long-term financial goals. To learn more about Saagar Gupta and his professional pursuits, please visit his website.