With the Nasdaq-100 Index (NDX) down 24.4% -- bad enough for a bear market – year-to-date, it’s clear growth stocks aren’t working.
Down 23.29%, the S&P 500 Growth Index is no prize, either. In other words, it’s easy to resist growth stocks and thematic strategies at the moment. The tale of the tape indicates those concepts should be resisted. Temporarily, at least.
On the other hand, the current environment could ultimately be a case study in buying low, buying when there’s blood in the streets, being greedy when others are fearful and a slew of related, time-tested market wisdom.
Put it all together, and now is an ideal to consider putting together a growth stock/fund shopping list. To be clear, a shopping list is simply ideas. Actionable as those ideas may be, they don’t need to be acted on today because it’s probable more downside awaits growth stocks. With that in mind, metaverse investing is considerably more attractively valued today than it has been in some time – perhaps ever.
Metaverse Investing Down, But Not Out
There’s no denying the investable metaverse is a growth concept. Whether it’s single stocks or funds, investors that venture into this space will encounter some familiar names, but also a landscape littered with growth fare.
“While many of these concepts are already used in gaming, the metaverse has consumer applications—imagine using a digital twin to try on clothing or shop for real estate and home décor—and the potential to transform everything from entertainment to education. Instead of reading about ancient Rome, for example, students could experience it virtually,” according to Morgan Stanley research.
It’s hard to argue that the metaverse is tantalizing from an investment perspective and it’s in the early innings – probably the first inning – of its growth.
“There are billions of dollars of projected revenue expected to be created in the metaverse in the years to come, and with so much potential for growth, it’s easy to see why investors would want to get involved,” according to J.P. Wealth Management.
As for the problems metaverse equities are facing, it’s a simple case of once beloved growth fare following out of favor. Rapidly at that. Some of the more venerable metaverse stocks include Meta Platforms (NASDAQ: FB), Apple (NASDAQ: AAPL), and semiconductor giant (NASDAQ: NVDA). Apple is the best-performing member of that trio year-to-date and that’s not saying much because the stock is down is 13%. It’s no longer the world’s most valuable company, recently ceding that title to Aramco – Saudi Arabia’s state-run oil producer.
Familiar Concepts Support Metaverse Thesis
In more sanguine times, it’d be a gift. Today, it’s a curse, but it is worth noting the metaverse investment thesis is supported by some familiar themes.
“We think the metaverse is most likely going to be a next-generation social media, streaming, gaming and shopping platform,” says Morgan Stanley internet analyst Brian Nowak, “In some ways, we already live in a metaverse, as shown by the total time spent by daily active users in the U.S. on digital platforms.”
Bottom line: There will be bumps along the way. That’s to be expected with any form of disruptive investing, but investors that can wait for more declines to pass can find substantial metaverse opportunities.
Related: Equity Income Strategies Proving Less Bad Than Broader Market in 2022