Millennials: New Era, New Opportunity

One of the best parts of my job is talking with people. I like to get a sense for what they’re most interested in, and these days more and more investors are asking for my insight on what’s next for Wall Street. What are the budding themes that are shaping our economic future and driving the next generation of investor wealth?

It’s the right question to ask, and as we talked about last time, you’d be surprised how few people on Wall Street know to ask it. There are several exciting and fascinating mega trends unfolding that are sure to give us plenty of opportunities to make good money, and I’ll be sharing them with you in the next few articles.

One of my favorite trends that investors simply can’t afford to ignore is the millennials – it literally doesn’t get more “next generation” than this! You’ve probably heard plenty about this rising demographic, and it might not all have been good. Millennials tend to get a bad rap for being entitled, dependent on their parents and tech-obsessed. But this group is also resourceful, creative and entrepreneurial-minded – after all, these are the people who made blogging into a more lucrative career choice than banking!

It all starts with one astounding fact: We are witnessing the beginning of the greatest wealth transfer in U.S. history from the once-dominant Baby Boomers to their children, the emerging millennial generation (generally born between 1980 and 2000). And investors who are shrewd enough to realize the immense potential this demographic shift holds are in an outstanding position to benefit early and often.

I love talking about this trend because everybody stands to benefit. Whether you are a retiring Boomer or a millennial yourself looking to invest for your family’s future, there are so many exciting ways to profit. There are three million more millennials than their post-war parents, with the oldest just hitting their mid-30s and the youngest still in college. They’re getting ready to take the economic spotlight as they flood the workforce, start families and enter their prime earning years.

According to a report conducted by Accenture, millennials spend roughly $600 billion each year, and by 2020 – just three short years from now – that number will more than double to $1.4 trillion annually in the United States alone. This would represent 30% of total retail sales. Wall Street may not be looking there quite yet, but I’m not waiting and you shouldn’t either!

So the question becomes – what are the best ways to play this impending economic boom? And if you’re part of it, how can you profit from the trends you already see growing around you every day?

Keep an eye out for my next article for the answer!

Old Wall Street vs. New Wall Street

Investing has always been my passion. The way Wall Street does it has not.

Nearly 20 years ago, I took my first job as a stock broker, excited as can be to help my clients make money by doing what I absolutely love to do – uncover great stocks. It didn’t take long for that excitement to turn to discouragement.

First of all, I realized that most brokerage firms recommended the same stocks, most mutual funds held the same stocks, and most investors owned the same stocks. I was face to face with the proverbial herd mentality, and boy was it ever true. I learned that Wall Street is just too lazy to find the best stocks, preferring to stick with what they know and do what they’ve always done. Their concern is making commissions and getting new clients, which means they are salespeople, not stock experts. I saw up close how investors paid very high fees for “expert” advice, but nearly every investor ended up owning the same 10 stocks!

I took my passion to radio and TV for a while, and when I started my TV career I was privileged to see into Wall Street even deeper. I shared the camera with some of the most well-known investors of the last century. I learned a lot from many of them, but it was still amazing to me that some of the old Wall Street guys would make hundreds of millions of dollars per year – yes, you read that right – and their best stock idea was one of the largest companies in the world that almost everybody owned anyway.

I knew there was a better way, that there was big money to be made outside of those same stocks that everyone had in their portfolios. The next great companies that could make a difference in people’s lives were out there, trading among the thousands of stocks that Wall Street ignored.

Those were the stocks I started to cover, and the ones I wanted my clients in when I started my own financial firm. I see more than ever how this new way of looking at Wall Street is better than the old way. Finding those next great companies also meant going about things differently, so I developed a multifaceted approach that big old Wall Street was too lazy to try – the next generation of investing.

Next-gen investing goes beyond the myopic focus of Wall Street. The big firms settle on one way of researching stocks, and that’s all they do. I equate my approach to a three-legged stool that incorporates 1) fundamentals, 2) charts and technical analysis, and 3) intangibles, catalysts, themes and other drivers that won’t show up in the stock screens used by 99% of Wall Street. I’ve found that this new way of investing increases our winning percentage, keeps our losses infrequent and much smaller than our gains, and enhances our ability to find the next big winners.

Those big winners all come from what I like to call next-gen themes, unstoppable trends that will create more opportunities than Wall Street can even imagine right now because they aren’t looking. Wall Street most often takes what’s called a bottom-up approach, meaning they just look at a stock. As you can imagine, too often they miss the forest that’s right in front of them because they’re just looking at one tree – and it probably isn’t even the best tree.

One of the quickest ways to watch your portfolio stagnate is by not keeping up with the larger stories that are fueling the market’s next moves. I like to call these mega trends, and right now we’re watching some of the most exciting trends in decades play out. Everything from next-gen technology to new sources of energy and even a changing global landscape are creating explosive opportunities that many are missing out on.

I’ll be talking in detail about these trends in future articles, so check back here on the website for much more on my latest investment picks and how we can profit from the next-generation companies that are ready to change Wall Street.

Millennial Trends: Mobile Lifestyle

In our last visit, I talked about the immense profit potential that the budding millennial demographic holds for savvy investors as we witness the greatest transfer of wealth in U.S. history (if you missed it, catch up here!). This is one of my favorite megatrends driving Wall Street right now, and within that I’ve identified four hot spots – I call them secondary trends – that are leading the charge.

Social media is powerful among millennials. Today I want to show you how it goes beyond tweeting or posting to Facebook.

The reason millennials are always on social media is that 86% of them own a smartphone, so they’re always connected and know how to take full advantage of having the world at their fingertips. They also use their smartphone to bring the lifestyle they want right to their door.

As a result, the service industry is ready to take off, opening up even more areas we can profit from. Remember, millennial spending is expected to reach $1.4 trillion annually in the United States by 2020, representing 30% of total retail sales. You better believe a good chunk of that is going toward making life more convenient!

Take food, for example. It’s as old as the human race itself, but now we have a next-generation way to make money. Millennials will eat out 177 times in a year, which is 20% more than the 146 times for other demographics, but that doesn’t always mean it will be in a restaurant. GrubHub (GRUB) provides an online and mobile platform for pick-up and delivery orders, connecting diners to over 40,000 local restaurants in 1,000 cities.

The ease of ordering online or through an app, as well as taking advantage of deals on otherwise pricier hot spots, makes this company a millennial favorite as well as a personal favorite – I live off GrubHub whenever I stay in New York! Good thing they deliver to people older than millennials, too. I’m can’t say I’m responsible for all of the company’s 36% growth in sales last year (the stock was up 48%), but I did my share.

Even fitness has a mobile component for millennials. Gone are the days of sticking with one gym membership or just going out for a run. Millennials like options, and MINDBODY (MB) provides them. The company operates a cloud-based software and payments platform for the wellness industry. Simply download the app to find and book fitness classes nearby, rate and review different studios, find deals on new exercise crazes, manage your workout schedule and track progress. It’s also great for finding fitness options while traveling – this is another app I like to take advantage of on the road.

This young company is an intriguing investment option as it should turn profitable for the first time next year, and the period leading up to that can often give you some of your best buying opportunities. Current expectations are for a loss of $0.11 per share in the current year followed by profits of $0.17 a share next year, and I see them earning up to $0.62 a share by 2019.

Millennials, let me ask you a question: When was the last time you stopped at an ATM to grab some cash to pay a friend back for lunch? Or wrote a check to cover your half of a vacation rental? The rest of us know what I’m talking about, but chances are good you millenials are shaking your heads at me right now. PayPal (PYPL) has stepped in to make online payments the preferred method of person-to-person transactions, and its new ownership of Venmo, a popular payment app, is poised to be a big win for the company.

If you want the world at your fingertips, you need to gain access to the mobile network, and millennials in particular must choose a wireless carrier to provide the high levels of data needed. T-Mobile (TMUS) is a leader in unlimited data plans and has been a top choice of millennials for years. It has extra appeal right now as a takeover target since larger players are looking to gain access to the growing population. That’s just another reason why the stock has gained more than 60% in the last 12 months.

With all that we’ve talked about so far this week, I hope you are beginning to see the many ways to profit from the millennial boom that is still in its early stages. And remember, because it’s still early, smart investors can get in ahead of Wall Street, which is how to make the big money. We have much more to talk about, so stay tuned for my next article – and thanks for reading!

Profit from the Millennial Mega-Trend

The Baby Boomers used to hold the title as the largest demographic group in U.S. history. Not anymore. They’ve been dethroned by the Millennials. This sweeping trend will generate huge wealth-building opportunities for years to come, and now is the time to start making money. Matt will tell you where some of the biggest impacts are already being seen, and he’s got a couple of stocks for you to get you started.

Old Wall Street vs. New Wall Street

Wall Street hasn’t changed the way they do things for years. Why should they? They’re doing just fine and making a ton of money – for themselves. But what about you? Is your wealth growing the way it should be? Not if you’re following Old Wall Street. There is a better way. A way to truly build wealth by finding tomorrow’s winners today. It’s the New Wall Street, the next generation of investing that works for everybody.