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How to Invest in 5G Stocks

how to invest in 5G stocks

As an investor, you need to be able to spot trends and put your money where it will count the most — and few sectors are hotter than 5G, so we’ve put together a guide for how to invest in 5G stocks.

It’s a great feeling when you find the next big thing to invest your money in — especially when you’re able to do it before everyone piles in, pushing share prices up.

People have made millions spotting trends and using analysis to seek out companies and sectors they bet will pay off big.

One of those up and coming trends is the 5G revolution.

There are a lot of things involved before deciding when to buy and where to put your money. Once you’ve learned how to invest in 5G stocks, check out Money & Markets’ free, exclusive report to find the No. 1 5G stock play for 2020.

What is the 5G Revolution?

The first thing that’s important to know is exactly what the 5G revolution entails. It’s hard to invest in something if you aren’t aware of what it really is.

The “G” in 5G means generation. Essentially, this is the fifth generation of mobile wireless connectivity. It means faster connections, better wireless connection stability and much lower latency (lag time) in that connection.

Basically, the intent of 5G technology is to create faster wireless connections that allow smartphones (or anything with wireless connectivity) to be faster and more efficient.

It has the potential to transform how we do business as more than 65% of companies are planning to find a way to deploy 5G technology in 2020, according to a study by Gartner.

High-end estimates project 5G connections to be 10 to 20 times faster than the current 4G LTE connections we have right now. To put that in perspective, download speeds using 4G connections average about 20 megabits per second. With 5G, that is expected to go up to between 500 Mbps to 1,500 Mbps.

Imagine downloading full-length movies or video games in seconds, rather than minutes or even hours. That’s the difference 5G technology will make.

Companies involved in this revolution — whether through products or infrastructure — are positioned to provide huge gains for investors.

Knowing what the 5G revolution means is key to understanding how to invest in 5G stocks.

How to Invest in 5G Stocks: More Than Just Internet

When you first ponder this kind of technology, your mind likely starts thinking of internet providers as being the biggest benefactors.

They will benefit, to be sure, but they certainly won’t be alone.

Telecoms, hardware, software and infrastructure providers stand to see huge gains as a result of the 5G revolution.

That opens the door to a ton of companies. Companies that make microchips for devices needed to use 5G technology to companies that lease tower space to cellphone providers are all in the mix.

Other companies like those who build network access equipment to companies strong in cloud computing will also gain with 5G technology.

The important thing is not to solely focus on companies you see on television touting 5G implementation. There are so many more out there that stand to give you even bigger gains.

If you want to know how to invest in 5G stocks, a key factor is to not necessarily focus on the companies creating the biggest headlines.

Want to learn more about the coming 5G revolution? Click here to get Money & Markets’ free report and find out the No. 1 5G stock to buy in 2020.

How to Invest in 5G Stocks: Diversification is Key

If you want to build out our portfolio to capitalize on the 5G revolution, you want to blend your holdings.

Focusing on individual companies is great, but there are other avenues out there that can provide just as much, if not more return on your investment.

One option is to look at exchange-traded funds that focus on 5G companies.

ETFs are automatically diversified as they hold numerous companies in certain sectors.

Another area where you can capitalize on the 5G revolution is with artificial intelligence. AI stocks are going to explode once 5G takes hold. From automation to computing, companies are going to look to artificial intelligence as a way to become more efficient.

An additional way to make even more money on 5G is to find stocks that also pay out a dividend.

A dividend is a payment made by a company to its shareholders. It is paid by the revenue the company earns. A dividend can go up or down, depending on its revenues in any given quarter.

Shareholders of 5G companies stand to gain even bigger because as the 5G revolution expands, share prices are sure to go up. As the revenue of those companies goes up, so will their dividends

Being diversified is key to knowing how to invest in 5G stocks.

Understand the Risk

All three major stock indexes are in bear market territory and the global economy is on the verge of or already in a recession thanks to the novel coronavirus pandemic.

That means a lot of volatility is still possible in the markets.

It also means companies may be scaling back or delaying their 5G rollouts because of so much uncertainty.

You have to understand that investing in 5G stocks is a long-term play. It will take time for the revolution to fully take hold around the world.

So when investing in 5G stocks, like with any other investment, know your risk tolerance. The safe bet is not to invest any more than you are willing to lose.

Be aware that there will be a ton of companies out there trying to profit from the 5G revolution. They aren’t all viable investments.

Understanding your risk tolerance is key in knowing how to invest in 5G stocks.

The bottom line is you have to treat investing in 5G stocks like you would any other equity.

That means doing your homework, diversifying your investments and understanding that risk is part of the game.

If you keep those thoughts in mind, investing in 5G stocks can be a great way to earn long-term gains.

Editor’s note: Check out our AI ETFs to buy now here, and check out our 5G dividend stocks to buy now here. And don’t forget to check out our free, exclusive report on the No. 1 5G play for 2020.

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