Which stock market sectors could be ripe for start-up investment?

Which stock market sectors could be ripe for start-up investment?

It is estimated that there are now around 16m people in the USA who are self-employed and run their own businesses. Whether it is due to being made redundant from a previous job or the desire to be their own boss, more and more people are now deciding to go it alone. The rapid development of tech like laptops, smartphones and apps has all helped as have digital marketing channels like social media. When you put this all together, it is no wonder that so many people are doing it for themselves.

One option to consider if you are thinking of becoming self-employed is starting out as an investor. The easiest way to begin your investment journey for many is using online brokerages to buy stock in companies. If the companies you invest in see their share price rise in the future, you make money.

As you would expect, the real key to being successful as a self-employed investor is finding which companies to put money into. While it is wise to think about the big names who usually perform well, it is also worth looking at new start-ups in the right sectors. While these can be trickier to call, if you invest in the right business, the returns you see can be large.

But which niches in 2020 could be where the best start-ups are found?

Space

To begin with, we are going out of this world! Although it may not immediately spring to mind, space is one sector that is not only predicted to do well in the future but also to be a breeding ground for many start-ups who could benefit. Business leader Dylan Taylor is an expert on the space exploration industry along with being a well-known philanthropist. Taylor is backing space to flourish as a sector in 2020 and beyond – with his business acumen, this is certainly something to take note of.

Outlets like CNBC are also tipping this sector to become a trillion-dollar industry in the not too distant future. Much of this growth is likely to be driven by hungry new start-ups who have been disrupting how things usually work there. As the demand for private space travel, new satellite space tech and so on grows, so too could the start-ups who make it happen.

Technology

It should not come as a big surprise that the tech sector is listed here. Not only is it well-known for being the perfect place for setting up a new business but it has had a great few years. This saw it become the first trillion-dollar sector on Wall Street during the 2010’s. 2020 and beyond looks set to carry on this trend as tech becomes ever more integral to our lives. From the Internet of Things to electric cars or revolutions in eyecare tech, companies here will continue to prove very investable. This extends to new start-ups in the tech space who can make their investors a lot of money with the right idea and marketing. This could mean that finding new tech companies to invest in may appeal more than well-known ones like Facebook or Dell.

Renewable energy

One sector that could be on the way up is renewable energy. Although it has been bubbling away in the background for a while, 2019 saw it really come to the fore on a global stage. More people are now willing to do their bit to combat climate change which could see new start-ups appear to meet that demand. As an investor, this certainly makes it an interesting area to look for new start-ups in. From innovations in how we heat our homes and access renewable energy sources, to how we deal with our waste, this is the perfect industry for new companies to make their mark.

FinTech

A branch of the tech sector which is sure to be home to some interesting new companies in 2020 is Financial Technology. This is a sector which has hit the headlines in its own right in recent years and could really take off in the future. Much of this could be down to emerging Blockchain technology which will be used to underpin more secure payment solutions. With applications in areas like banking and e-commerce, it is likely that we will see lots of new companies form in this area who may be worth investing in to make big profits. Getting in now could allow you to buy when share prices are low and reap the rewards as they climb in the future.

Take your time and do your research

If you plan to start a new career as a self-employed investor, taking your time to get the basics down and learn how the market works is key. This is certainly true when it comes to investing in stocks and shares. A great tip is to try and find sectors which are set to do well themselves and attract new start-up ventures. By choosing the right start-up to invest in at an early stage, you can hopefully make some decent money when they use the sectors overall momentum to take off.

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