“Cloud” computing is transforming our daily lives in many ways…
For example, it allows folks to easily access data and services from almost anywhere. As a result, people can work remotely and collaborate with their peers all around the world.
The health care industry is also a lot different due to cloud computing. We can meet with doctors through “telehealth” appointments, quickly access our records online, and more.
But uploading sensitive information to the cloud comes with risk…
In short, hackers try to steal this data. And they’ve turned it into far more than a hobby…
It’s an underground multimillion-dollar market. According to a report from cybersecurity leader Palo Alto Networks (PANW), hackers demanded ransom payments as high as $50 million last year.
As more companies transition to digital solutions, “getting hacked” is a huge concern. So as cloud computing grows at a rapid pace in the years ahead… so will cybersecurity.
Cybersecurity is the practice of fighting back against these hackers. It’s an inevitable long-term trend. And as investors, we should be looking for ways to get exposure to it.
Fortunately… the Power Gauge can help us do that.
As I’ll show you today, it all starts with one simple step. And in the end, it tells us right away if it’s a great time to invest or not…
Today, we’ll focus on the ETFMG Prime Cyber Security Fund (HACK).
HACK is what investment pros call a “thematic” exchange-traded fund (“ETF”). In general, thematic ETFs allow folks to invest directly in the market segments they find most compelling.
At the end of May, investors actively traded roughly 275 thematic ETFs. These investments currently hold about 1% of all of the money in the U.S. ETF market.
Specifically, HACK is a “one click” way for investors to gain exposure to many of the top cybersecurity stocks. It holds shares of roughly 50 companies in the space – including Palo Alto Networks, Fortinet (FTNT), and Splunk (SPLK).
When you buy into a thematic ETF like HACK, you’re buying a basket of companies. And sometimes, you do it without knowing a lot about many of them.
The good news is… the Power Gauge can help.
For example, the system recently assigned HACK a “very bullish” rating. That tells me instantly that many of the stocks inside this ETF earn “bullish” or better ratings.
You can see what I mean with HACK’s Power Bar ratio. It adds up the “bullish,” “bearish,” and “neutral” stocks in the ETF. Here’s what HACK’s Power Bar ratio looks like today…
HACK currently includes 27 “bullish” or better stocks. And only one stock within the ETF is rated as “bearish” or worse.
Remember, the Power Gauge has rated each of these stocks using its 20 individual factors. So with just one simple step, I can tell that HACK is overwhelmingly positive right now.
Finding HACK wasn’t hard. And even better, it’s a way to diversify your risk…
You’re not putting all your eggs in one basket when you use a thematic ETF like HACK. You don’t have to pick the winner in the cybersecurity space. Rather, you can own them all.
That way, you can confidently bet on the long-term trend itself. If one company struggles, it doesn’t spell disaster for your portfolio.
This approach can help smooth out volatility. And it can potentially provide more stable returns over time.
So when it comes to the cybersecurity theme, keep your eyes on HACK today.
Good investing,
Pete Carmasino
