Investing in Defense Industry – Taking Advantage of Global Unrest
With ongoing conflicts throughout the Middle East which show no signs of going away, now is a good time to think about investing in defense industry businesses. While this is always a good area to invest in during times of conflict or economic downturn, now is a particularly good time to think about this action for several reasons. Defense related stocks have been steadily rising in response to news about Iran’s nuclear ambitions, North Korean missile stockpiling and ongoing conflict in Iraq and Afghanistan. Investment analysis has determined that it is a good idea to respond to these higher stock prices while they are still at an affordable level.
One thing to keep in mind while you are investing in defense industry stocks is that these types of conflicts are generally bad for the overall market. While you may need to err on the side of caution in purchasing other stocks and securities, when it comes to the defense industry there may be no better time to buy in. Defense spending in the US alone has grown over 82% in the past ten years, with a budget of over 500 billion dollars. This increase is seen in the GDP as a growth from 3% to 4.1% of the GDP.
Ongoing unrest between Israel and its neighbors means that there is likely to be a steady accumulation of arms for the next few years to come, as there seems to be no sign of this conflict ending. To successfully think about investing in defense industry businesses, including weapons manufacturers, however, you must keep a steady eye on the international news and do your research. Find out what companies have contracts with the US government and what types of technology are being developed at the moment for the best results.
Some of the top defense industry heavy hitters that have seen a sharp increase in shares include United Technologies, General Dynamics, Raytheon, and Northrop Grumman. With the help of an investing professional, you can decide whether you want to invest in these big names, or look for smaller up and coming technology companies. Investing in defense industry businesses is something that is wise to get in on as early as possible, before the prices of these securities skyrockets any further. Even in the toughest global economic climate, this is the type of industry that will continue to grow, perhaps more than ever before.