Can it be true? Next month we’ll be entering the third decade of the of the third millennium in the common era?
Looking back on the last decade, my most prescient stock buys were in the technology sector. As the market recovered from the Great Recession, I added Cisco Systems, Microsoft, and Intel to my holdings. I liked them because they paid dividends which, not too many years ago, were very attractive for their price point. (Cisco and Intel are still attractive from a pure dividend play perspective. Microsoft has been my best performer from a growth perspective but the yield today leaves me hesitant to add more shares.)
Of course, my dividend focus steered me clear of some of the decades biggest winners — the FAANGS. But Facebook, Apple, Amazon, Netflix and Google eluded me. But I’ll settle for what I got from the technology rally that dominated the stock market for much of the 2010s.
So what will the next decade look like?
Mark Haefele, chief investment officer for UBS Global Wealth Management, sees four economic trends that could drive big returns for companies in the next decade: sustainable investing, genetic therapies, digital transformation, and water scarcity. (His outlook was featured in Barron’s today.)
That means companies that focus on “green” initiatives should fare well. The spread of 5G technology will also facilitate the digital transformation of businesses across industries.
Because 5G will enhance smart phone performance, companies in the telecommunications space should benefit from spread of 5G wireless technology.
An earlier Barron’s article highlighted Broadcom (AVGO) as one stock that might benefit from 5G networks. And with a dividend yield at nearly 4% today, it’s a tempting prospect for income investors.