If you’re a longtime Crowdability reader, you’ll recognize that today’s article is part of a tradition.
Each year, Matt and I try to identify the fastest-growing market sectors and the most profitable trends.
Then, after sharing those sectors and trends with you, we help you capitalize on them over the next twelve months.
So in today’s essay we’re going to do two things:
First, we’ll look back on our 2016 forecasts and see how they panned out...
And then we’ll show you where to find profits in 2017.
2016 Predictions Reviewed
Last year we made three big predictions:
1. The Private Stock Market — First, we predicted that the private stock market would finally open its doors to all investors.
To prepare yourself, we recommended that you learn all about early-stage investing. That way, when the private markets opened up, you’d be ready.
How did we do on this prediction?
On May 16, 2016, the private market finally opened its doors to all investors, and many Crowdability readers were ready.
Thousands of our readers made their first private market investments in 2016—and some made their first private market profits.
For example, last year we wrote to our subscribers about an automaker called elio. Elio’s goal was to build a new type of ultra-affordable car.
To help accomplish its goal, the company decided to raise capital from regular, everyday investors like you. Shortly after we wrote about the company—in fact, it was less than 60 days later—Elio went public.
And Crowdability readers who invested were able to lock in gains of 325%.
We’re happy to say that we were “right on the money” with this prediction.
2. Stock Market Slowdown — We made another bold prediction last year, but it didn’t involve the private markets. It involved the public markets.
We predicted that at best, stocks would stagnate in 2016—and at worst, they could pull back significantly.
When we made this prediction, we were seven years into the longest bull market run in history. The market had been (and still is) artificially propped up by low interest rates.
Therefore, we recommended that our readers start looking for growth opportunities elsewhere.
On this prediction, we were wrong. In 2016, the Dow jumped by almost 15%. (Our logic may have been sound, but our timing was off.)
We still believe the stock market is due for a pullback. But given the new administration in Washington, it’s unlikely the market will crash anytime soon.
3. America’s Next Cash Crop — Finally, we predicted that the legalization of marijuana would lead to ample profit opportunities.
This prediction proved to be correct.
Another half dozen states legalized marijuana in 2016, and pot stocks performed extremely well. In fact, there were a number of triple-digit “winners.”
For example, Axim Biotechnologies, a developer of cannabis-based pain therapies, saw its stock soar by 770%.
What’s Next?
We ended up being right on two out of three predictions.
Not bad, especially given the uncertain nature of the markets.
But that’s all in the past now. To continue helping you earn above average returns, we need to look to the future.
So here’s where we’re looking for profit opportunities in 2017:
1. Pot Profits Continued — We believe there will be continued strength in the marijuana sector.
As more states legalize medical and recreational marijuana use, hundreds of new companies will enter the market.
From infrastructure companies that supply growers with tools and technology, to marijuana-related biotech companies, the opportunities are endless.
And while most of the “pot profits” in 2016 went to publicly traded companies, we believe the biggest gains going forward will come from private pot stocks.
And now that all investors (regardless of income or net worth) can invest in private companies, you can claim a stake in these companies long before they go public.
2. Artificial Intelligence & Machine Learning — You may have heard these two buzzwords recently...
And you can expect to hear them a lot more in 2017.
Artificial Intelligence (AI) and Machine Learning are currently two of the hottest trends in the technology sector. That’s because they enable software to learn.
For example, the automaker Tesla (NASDAQ:TSLA) uses AI and Machine Learning to “teach” its cars how to drive on their own. As a Tesla owner drives his or her car, the car’s software is observing everything the driver does:
It “learns” how a driver slows down, speeds up or reacts to every event on the road. And after enough learning, the car can drive itself.
As another example, credit card companies and banks are using AI and Machine Learning to predict default rates amongst borrowers. And with the help of these technologies, their systems get “smarter” and improve in accuracy over time.
A number of exciting start-ups have already entered this space, and we believe this trend will accelerate into 2017.
3. Cyber Security — Given the hubbub around the recent Presidential election—specifically around the hacking of the DNC emails—expect to see a great deal of attention (and capital) paid to Cyber Security companies this year.
It’s estimated that cyber attacks cost U.S. companies over $250 billion annually. And globally, that number is closer to $1 trillion.
Over the next three years, annual spending on cyber security solutions will increase to an estimated $46 billion.
With so much capital at stake, we expect many new companies will step in.
And, because cyber security is a mature industry, we expect that many of the larger players in this space will acquire these new upstarts.
That means early investors will have the opportunity to lock in quick, large gains.
Continuing the Tradition!
We’ll keep you up to speed on these sectors throughout the year...
And when possible, we’ll share actionable investment ideas that could hand you big gains.
We look forward to continuing our tradition of making predictions—and we’ll circle back with you next year to see how our predictions played out!