3 Ways to Profit From “Maturing” Millennials
There’s a major shift taking place in the market right now. One that is being driven by 80 million individuals changing their buying habits.
For traditional investors, this shift is completely unexpected. That’s why unfortunately, most of your friends and neighbors will totally miss out on the opportunities I’m going to share with you today.
But if you’ve been following The Daily Edge for the last few months, you’re probably already ahead of the game.
Today, I want to make sure you’re up to speed and ready to profit from a widespread change for the U.S. population…
The Millennial Generation is Growing Up!
You’ve probably heard some stereotypical definitions when it comes to the Millennial generation.
As a general rule, “Millennials” refers to the generation that was born between the early 1980’s and the late 1990s. There are about 80 million Millennials — mostly in the early 20’s to late 30’s age group. And up until now, this generation has been often characterized as entitled, somewhat immature, and less interested in starting a traditional family.
Now there’s plenty of debate as to why the Millennial generation has earned this stereotype, and even more debate as to whether the categorization is accurate or not.
I’m not here to argue whether this perception is true. I prefer to view people on an individual basis based on their own personal experiences and character qualities. (After all, I feel very little affiliation with my own “Generation-X” demographic).
But I am here to tell you about a major shift that is clearly taking place for the Millennial generation. One that is driving some key areas of the market. And one that will make you a lot of money if you know what to do.
You see, the Millennial generation as a group may have taken longer to “grow up” than previous generations. But the statistics show that this group is finally starting to follow in the path of their parents.
In other words, Millennials are growing up… They’re getting married… They’re buying houses… They’re having kids… And they’re buying family vehicles…
Just like their parents, grandparents, and great-grandparents.
The only difference is, the Millennial generation is very large.
With a population of about 80 million, the Millennial generation is much larger than the 65-million strong “Generation-X.” More importantly, the Millennial generation is moving into the prime spending life period, where large purchases are most likely to be made.
That sets up a very exciting opportunity for savvy investors…
Three Ways to Profit From Maturing Millennials
“Americans aged about 18 to 34 have become the largest group of homebuyers and almost half live in the suburbs.1”
So says a recent Bloomberg article covering the recent shift in Millennial lifestyle decisions. The article noted that it was initially tough for Millennials to make home purchases as young adults, because many graduated from college with significant amounts of student debt, and faced a weak job market.
But today, the job market has improved dramatically. Plus, many in the Millennial category have been able to pay down low-interest student debt, to the point where their finances are now in a more healthy state. That gives this demographic much more ability (not to mention desire) to take the exciting step of home ownership.
Of course, one problem many of these Millennial buyers are running into is a low supply of new homes for sale.
With strong demand and low market supply of homes, home construction companies enjoy a very profitable market. These stocks have been quietly trading higher, while flying under the radar of most traditional investors.
While homebuilder stocks were hit hard during the financial crisis, today’s surviving companies are much better positioned to profit from a strong residential real estate market. Conservative balance sheets, rising profits, and strong demographic demand should keep stocks in this industry rising for years to come.
A second way to profit from the Millennial generation shift is by investing in U.S. auto manufacturers. After all, a shift toward family cars will not only boost unit sales, but will also lead to demand for larger and more expensive SUVs.
According to Bloomberg, sales of large SUV’s are up 11% in the first half of the year. This category includes the biggest land yachts like Ford Expeditions and Chevy Suburbans.
Midsize SUV sales are up 9% this year and small SUV sales are up 4%. The trend is expected to grow for the next several years, as more Millennials start families and start the never-ending chauffeur experience.
Keep in mind, large SUVs carry much higher profit margins than regular sedans. So auto companies will see profits grow thanks to Millennials. Shares of General Motors (GM) and Ford Motor (F) are currently trading at exceptional values with high dividend yields. That makes these two U.S. automakers very attractive investments at today’s prices.
A third way to capitalize on this Millennial shift is to buy shares of home improvement retail stores.
Yes, I know the retail area has been hit hard by Amazon. But shares of Home Depot (HD) and Lowes (LOW) have moved steadily higher for the last few years. Strong demand for appliances, tools, mowers, and other home ownership necessities should keep these companies generating hefty profits.
And there are some who believe that one of these two companies could become a target for Amazon in the next few years.
Now I’m skeptical as to whether Amazon would actually take the plunge and merge with one of these blue-chip companies. But keep in mind that Amazon did buy Whole Foods Market in a major transaction that sent WFM shares up 29% in a single day. So that sort of overnight gain is certainly a possibility.
The most important takeaway from today’s alert is the the Millennial generation is on the move. These young adults are shedding their established stereotype and moving into a key buying period. If you ignore this major shift, you’ll miss out on some excellent opportunities. And if you participate in this trend, you’ll be in great shape to grow and protect your wealth.
And that’s what we’re all about here at The Daily Edge.
Here’s to growing and protecting your wealth!
P.S.On Wednesday I told you why I think resource investing is so important and why I traveled all the way to Vancouver to learn from some of the world’s leading experts on this area of the market.
Well, today I’ve got some great news for you!
I’ve just been told that the Sprott Resource Symposium has released the audio files from the conference!
That means you can listen to all of the expert speakers including Rick Rule (CEO of Sprott Inc.), our very own Jim Rickards and Byron King, along with dozens of other natural resource experts!
While it cost me a few thousand dollars to fly to Vancouver, stay in a hotel, and attend this four-day event, you can have full access to this conference for WAY less.
But I’ll warn you, there were A LOT of great ideas covered at this conference. So it might be hard for you to choose from the dozens of opportunities this conference covers. Only one way to find out though!…