It's always a good idea to invest in companies with tried-and-true products or services -- but it's also a good idea to spice up your portfolio with a couple of bets on exciting, game-changing technologies. Before investing in the latest trends, though, it's important to do some research to make sure they aren't just fads of the moment and instead truly hold long-term potential. You'll never want the fear of missing out to guide your decisions.
Today, two trends stand out in my mind as ones that could score a win for companies, investors, and the general population. And now is time to get in on companies working in these particular areas. I'm talking about artificial intelligence (AI) and CRISPR gene editing. Let's find out more about these technologies and where you should park your $500 to benefit from them.
1. Artificial intelligence
Everyone is talking about AI these days, so much so that you may be wondering if this is just one of those trends that spurs excitement -- and then falls flat. No one can guarantee that any newish technology will truly take off, but it's fair to say AI holds a lot of potential and could result in progress in many areas over time. For example, companies will become more efficient by using AI to improve product design and creation and fulfillment services.
And in the world of healthcare, AI could be lifesaving. Companies are using it today to speed up drug discovery and make it more precise. Medical device players are implementing AI to tailor instruments and procedures to better serve each individual patient -- creating a form of personalized medicine.
So, how to invest in this exciting area? You could buy shares of companies that make the nuts and bolts needed to power AI. Here, I mean a company like Nvidia (NVDA 6.18%), leading maker of chips needed to train AI systems, or Advanced Micro Devices (AMD 2.37%), which recently launched a competing chip.
To get in on healthcare AI, you might buy shares in biotech company Moderna (MRNA 1.69%), which is using AI to help it bring better drugs to market faster. Another possibility is Medronic (MDT 0.62%). That company put a focus on AI a while back, and today uses it in various devices, including a tool that helps surgeons predict spinal surgery outcomes for each particular patient.
Some companies may post earnings gains right away, while other players, such as those in healthcare, may see the benefits of AI translate into earnings growth a few years from now. In either case, you could win by investing now.
2. CRISPR gene editing
CRISPR stands for "Clustered Regularly Interspaced Short Palindromic Repeats" of genetic information -- and some types of bacteria use it to defend themselves against viruses. These days, scientists are using the technique as a way to "edit" or fix faulty genes responsible for disease.
In fact, researchers are well beyond the exploration stage. One company in particular actually is approaching commercialization with a candidate based on CRISPR gene editing. And that's CRISPR Therapeutics (CRSP 0.34%).
The company and partner Vertex Pharmaceuticals have submitted exa-cel, their blood disorders candidate, to regulators and expect responses for the sickle cell disease indication in December and the beta thalassemia indication in March. CRISPR Therapeutics' process involves cutting DNA at a particular location and letting a natural repair process take place.
Intellia Therapeutics (NTLA 3.70%) is another potential CRISPR winner. The company plans to launch a pivotal phase 3 trial next year for NTLA-2002, its candidate for hereditary angioedema after reporting promising results in earlier trials. The genetic illness involves recurrent periods of severe swelling.
And a handful of other companies also are advancing potential CRISPR gene editing treatments for various diseases.
CRISPR gene editing is particularly exciting because, by fixing disease-causing genes, these companies may create not just treatments -- but cures. The technique holds potential in other areas, such as diagnostics and even agriculture. In fact, the market is set to expand at a compound annual growth rate of about 15% to more than $7 billion by 2028, according to Markets and Markets.
All of this means, by investing now, you could benefit from significant gains as these companies bring products to market.
So, how should you deploy your $500?
Your investment decision will depend on your comfort with risk and your interest in one or more of these exciting players. It's generally less risky to diversify across a few companies. And with $500 you could do that, even buying fractional shares to get in on some high-priced stocks.
If your portfolio already is well diversified, and you strongly believe in just one of these players though, you might consider buying just that particular stock.
Finally, always invest in players you aim to hold for the long term, meaning five years or more. In investing, time is on your side, and that means you generally have a lot more to gain by sticking with your favorite stocks and themes over time.
