Using Gut Instincts to Invest in the Future (2024)

Profiting from predictions is hard. But, oh, the payoff if your forecast is correct! Imagine that two decades ago you thought online retail was the Next Big Thing. Had you invested in a bookseller called Amazon, you might be rich.

Of course, had you bought into equally promising e-tailers — and subsequent failures — such as eToys or Pets.com, you might be broke. You need insight and luck for your ideas to generate cash.

AARP Membership

LIMITED TIME OFFER

Flash Sale! Join AARP today for $16 per year. Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP The Magazine.

Join Now

Do you have a vision of the future, plus the urge to profit from it?

We're here to help. All you need is some extra cash to invest — money you can afford to lose without breaking your bank account or your heart. (Consult a personal financial adviser before making investment decisions.)

We've asked investment professionals how people might invest in different individual stocks, mutual funds and exchange-traded funds (ETFs) based on the trends they foresee.

Stock Market

If you believe the stock market is heading to the moon, then consider broad-based index funds.

A few years back, the idea of the Dow hitting 26,000 was as nutty as (hee-hee!) self-driving cars. Look at things now. The major stock index has quadrupled in value since March 2009 — and last summer, stocks set the record for the longest bull market in U.S. history. If you think the Dow is destined for 36,000, the surest thing to buy is a total stock market index fund, which mirrors the performance of the broad market, says Maria A. Bruno, head of U.S. wealth planning research at Vanguard. One of your many choices is the Vanguard Total Stock Market Index Fund (VTSMX). The SPDR S&P 500 ETF (SPY) is another potential pick.

If you believe the stock market is in big trouble,then consider gold, cash or government bonds.

On the other hand, we don’t know how politics, technological warfare, environmental disasters or fragile economies will influence markets in the future. Major firms, including Charles Schwab, are forecasting lower returns for stocks over the next decade. Others on Wall Street have a deeper worry—that this aging bull market is a bubble just waiting to pop. In a downward spiral, retirees want to find shelter in safe havens. “Gold, cash and government securities such as Treasury bonds are typically among the safest places to be if stocks crash,” notes Patrick J. O’Hare, chief market analyst at Briefing.com.

Security

If you believe World War III is inevitable,then consider medical equipment.

Where there’s a war, there are casualties. In a sustained military engagement, companies that supply medical equipment and wound-care devices will likely see increased demand, Collins notes. These include Johnson & Johnson (JNJ), Zimmer Biomet (ZBH) and Smith & Nephew (SNN).

If you believe the stock market is heading to the moon, then consider broad-based index funds.

A few years back, the idea of the Dow hitting 26,000 was as nutty as (hee-hee!) self-driving cars. Look at things now. The major stock index has quadrupled in value since March 2009 — and last summer, stocks set the record for the longest bull market in U.S. history. If you think the Dow is destined for 36,000, the surest thing to buy is a total stock market index fund, which mirrors the performance of the broad market, says Maria A. Bruno, head of U.S. wealth planning research at Vanguard. One of your many choices is the Vanguard Total Stock Market Index Fund (VTSMX). The SPDR S&P 500 ETF (SPY) is another potential pick.

If you think World War III will be online,then consider cybersecurity.

Who might help shield us online? Lockheed Martin (LMT) for one, Collins says. More vendors are in the ETFMG Prime Cyber Security (HACK) and First Trust Nasdaq Cybersecurity (CIBR) ETFs.

Energy

If you believe renewable energy is gaining momentum,then consider windmill makers.

You may already own stock in a company involved in wind power, O'Hare says. General Electric (GE) is a leading supplier of wind turbines. Lesser known is Vestas Wind Systems (VWS), the largest windmill manufacturer in the world.

If you think demand will grow for portable power, then consider lithium mines.

Unless someone soon finds a better way for us to charge our iEverythings, we'll likely rely on lithium-ion batteries for some time to come. Michele Cagan, a certified public accountant and the author ofStock Market 101, recommends Global X Lithium & Battery Tech ETF (LIT), which invests in every step of the lithium-to-battery cycle.

Artificial Intelligence

If you believe the future of manufacturing is robots,then consider robot makers.

Do you think most industrial workers will be made out of metal instead of flesh and blood? Neena Mishra, director of ETF research for Zacks Investment Research, suggests you opt for funds focused on robotics. The iShares Robotics and Artificial Intelligence ETF (IRBO), which has a relatively low expense ratio, has nearly a quarter of its holdings in China and Japan. That gives you exposure to companies “we have not heard much of in the U.S.,” she says. Be aware, however, that the ETF also holds companies linked only peripherally to robotics, such as Microsoft and Google's parent company. The ROBO Global Robotics & Automation Index ETF (ROBO), a more expensive fund, has a tighter focus on the technology.

If you think in the future, we will be the robots,then consider implant makers.

If you believe the stock market is heading to the moon, then consider broad-based index funds.

A few years back, the idea of the Dow hitting 26,000 was as nutty as (hee-hee!) self-driving cars. Look at things now. The major stock index has quadrupled in value since March 2009 — and last summer, stocks set the record for the longest bull market in U.S. history. If you think the Dow is destined for 36,000, the surest thing to buy is a total stock market index fund, which mirrors the performance of the broad market, says Maria A. Bruno, head of U.S. wealth planning research at Vanguard. One of your many choices is the Vanguard Total Stock Market Index Fund (VTSMX). The SPDR S&P 500 ETF (SPY) is another potential pick.

Replacement knees and hips were only the start: Prepare for spares for other body parts.

Cagan notes that biotech company United Therapeutics (UTHR) recently teamed up with 3D printing firm 3D Systems (DDD) to create organs for transplants. Orthopedic-device makers are developing “pretty much replacement parts for your skeleton,” says Debbie Wang, a Morningstar senior equity analyst. She recommends Stryker Corporation (SYK) or Wright Medical Group (WMGI). Companies are also getting better at creating implants that take over the function of the heart, she adds; her suggestions are Edwards Lifesciences (EW) or Abbott Laboratories (ABT).

Longevity

If you believe someday soon, people routinely will live to 120,then consider retirement housing.

If we live longer, we'll need places designed for that, observes Nathan Geraci, president of the ETF Store. One choice is the Janus Henderson Long-Term Care ETF (OLD). The fund has big holdings in real estate investment trusts that have long-term care facilities. Another option is Global X's Longevity Thematic ETF (LNGR), which has more exposure to health care, pharmaceuticals and biotech.

If you think super-viruses pose a threat to our longevity,then consider biotech.

What will save us if a virus puts the globe in peril? Consider Merck (MRK), a leader in the fight against the Ebola virus, Collins notes. O'Hare suggests the iShares Nasdaq Biotechnology ETF (IBB), because it includes a broad selection of biotech firms.

Travel

If you believe we'll travel the world more often,then consider cruise lines, hotels and more fun.

Why not profit off the ways we'll retire? O'Hare sees the booming cruise industry — so popular with consumers 50 and older — as a recipient of leisure dollars, particularly Royal Caribbean Cruises (RCL), Carnival (CCL) and Norwegian (NCLH). That spending on good times, he says, will extend to airlines United (UAL), American (AAL) and Southwest (LUV), along with hotel chains Marriott (MAR), Hilton (HLT) and Hyatt (H). Collins also suggests travel-site operators TripAdvisor (TRIP) and Expedia (EXPE), because they stand to benefit from increased travel.

If you think outer space will be the next resort,then consider space tech.

"Beam me up, Scotty” might someday be as common as hailing an Uber. If consumer space travel takes off, look to Boeing (BA) to fly high, O'Hare points out, because the most popular space-tourism businesses — Elon Musk's SpaceX and Jeff Bezos’ Blue Origin — are still privately held. Or consider, Cagan says, blue chip DowDuPont (DWDP), maker of the sturdy fiber Kevlar, used in space suits and on the International Space Station.