Each year comes with its share of trials and tribulations. The best part of the recent high inflation (2022-2024) is that it is over, now it’s time to realign your financial ducks in order. With the market diving in late March 2024, a few top-performing companies carried the entire economy. This presents a colossal opportunity for investors over long-term savers with cash to spare.

The market priced in the losses, we are likely in for at least an 8% to 10% upswing toward the end of the year. If you are ready, it’s time to BUY low and HOLD for dear life.

Buy ETFs Low, and Hold for Highs

While most fin-social media pundits will scream Vanguard Total Stock Index $VTI to the day they die, I rather go for a more nuanced approach.

In other words, if you want to succeed, it is best not to take the average route. Dig a bit deeper for those sweet gains. My wife and I aren’t and we grew our net worth by $200k in 2020.

Over 20% is the Goal for 2021

The TNFG Fave Five ETFs for 2021 fall into these sectors: Tech, Cybersecurity (which is kinda tech), Health (and a bit more tech), Energy (Alternative tech), and Gaming (Supported by Tech).

Tech should not be a category any more.

Why invest in ETFs?

The technology sector outperformed the broader market over the past year. The top holdings were Tesla $TSLA, and Alibaba Sponsored ADR $BABA ($222.00 as of 12.24.20).
Cybersecurity industry underperformed in the last 12-months. However, the massive pandemic push toward all things work from home, telecommunication is in need of some security. This is another long-term hold (if you have the patience).
Though Big Pharma i.e. Pharmaceutical ETFs outperformed in 2020 with top ETFs like $KURE, and $IHE; time to rely on BioTech with ETFs like $ARKG. Top holdings include Invitae Corp. and Moderna Inc $MRNA ($123.39 as of 12.24.20).
The gaming industry, represented by both the consumer discretionary and communications services sectors, has outperformed the broader market in the past year. The ETFs with the best 1-year trailing total returns are HERO and $ESPO ($68.72 as of 12.24.20).
The alternative energy industry has far outperformed the broader market in the past year with big winners being $QCLN and $TAN. Top holdings include Tesla Inc. $TSLA, Vivint Solar Inc. $VSLR and Solaredge Technologies Inc. $SEDG.
Another promising venture. Global X Internet of Things ETF, $SNSR seeks to invest in companies that stand to potentially benefit from the broader adoption of the Internet of Things, as enabled by technologies such as WiFi, 5G telecommunications infrastructure, and fiber optics. This includes the development and manufacturing of semiconductors and sensors, integrated products and solutions, and applications serving smart grids, smart homes, connected cars, and the industrial internet. The investment possibilities are endless.

#1 Best in Tech ETFs for 2021 is a DRAW

ARK Next Generation Internet ETF ($ARKW)

Cost as of 12.24.20: $151.38
Performance over 1-Year: 127.6%
Expense Ratio: 0.76%
Annual Dividend Yield: 0.00%
Assets Under Management (AUM): $2.9 billion
Inception Date: September 30, 2014

$ARKW provides exposure to “Next Generation Tech“; companies prioritizing in Artificial Intelligence (AI), Big Data, cloud computing, cybersecurity, and Blockchain technology.

This ETF caters to large-cap growth stocks within the US technology sector, while 33% is allocated to communication services and 18% to the consumer discretionary sector.

The fund’s top three holdings include Tesla Inc. $TSLA ($661.77 as of 12.24.20), an electric vehicle and clean energy company; Roku Inc. $ROKU, a wireless-enabled devices that stream audio and video; and Square Inc. $SQ ($228.28 as of 12.24.20), a mobile payment solutions.

ARK Innovation ETF ($ARKK)

Cost as of 12.24.20: $133.03
Performance over 1-Year: 116.4%
Expense Ratio: 0.75%
Annual Dividend Yield: 0.41%
Assets Under Management: $9.9 billion
Inception Date: October 31, 2014

By contrast, $ARKK is engaged in “disruptive innovation”, such as AI, DNA technologies, energy innovation, automation and manufacturing, financial technology, and cloud computing.

This ETF is all about next gen growth stocks of various market capitalization within the US tech sector with about 36% to healthcare stocks, 29% to information technology, and 17% to communication services.

In short, ARKK’s top three holdings include Tesla, Square and Invitae Corp. $NVTA ($47.07 as of 12.24.20), a provider of genetic information to the healthcare industry.

#2 Cyber Protection Squad ETF for 2021 and Beyond

Global X Cybersecurity ETF ($BUG)

Cost as of 12.24.20: $29.03
Performance over 1-Year: 33.4%
Expense Ratio: 0.50%
Annual Dividend Yield: 0.64%
Assets Under Management: $45.7 million
Inception Date: October 28, 2019

$BUG tracks the Indxx Cybersecurity Index, which gauges the performance of companies that operate within the cybersecurity industry. If you need to know what is cybersecurity, click here.

This ETF relies on the increasing adoption of cybersecurity technology. Think of companies like Symantec and CrowdStrike.

That being the case, the goal is to offer security against intrusion and attacks on systems, networks, applications, computers, and mobile devices. This ETF has over 75% Domestic stocks, with the remaining quarter based out of the UK, Japan, India, and South Korea.

#3 Getting Healthier with TeleDocs

With particular application in 2020, Biotech companies use or modify biological processes in order to create new pharmaceuticals or therapies. Here’s 5 Reasons Why Telehealth Is Here To Stay (COVID-19 And Beyond).

We were this close to buying a miracle tonic for Covid19.

Providing the backbone for Pzifer and Moderna, Biotech companies like Vertex Pharmaceuticals Inc. $VRTX and Regeneron Pharmaceuticals Inc. $REGN are poised to be contenders for this ever-expanding marketplace.

Likewise, the biotech sector outperformed the broader market with a total return of +19.7% over the past 12 months. The best-performing biotech ETF is the ARK Genomic Revolution ETF $ARKG.

ARK Genomic Revolution ETF ($ARKG)

Cost as of 12.24.20: $103.10
1-Year Trailing Total Return: 134.3%
Expense Ratio: 0.75%
Annual Dividend Yield: 3.22%
Assets Under Management: $2.8 billion
Inception Date: October 31, 2014

$ARKG invests in the future of gene-editing, genetic therapy, molecular diagnostics, and stem cell advances. Its top three holdings include Invitae Corp. $NVTA, a medical genetics company; CRISPR Therapeutics AG $CRSP, a Switzerland-based gene-editing medical company; and Pacific Biosciences of California Inc. $PACB, a gene sequencing and biological observation company.

ARK Investment Management on Everything in 2020

#4 Embracing the Growth Alternative

With climate change looming, the race towards an alternative fossil fuel is speeding up exponentially. The Biden-Harris administration is charging forward with “Building Back Better”. Here’s hoping for domestic infrastructure changes and a retooling of the American workforce.

Consequently, alternative energy ETFs are on track to outperform in 2021 as it did in 2020 with hydrogen power firm Plug Power, Inc. $PLUG; solar energy cell company, Enphase Energy Inc. $ENPH; oxide fuel cell maker Bloom Energy Corp. $BE; and biofuels, renewable chemicals producer Renewable Energy Group Inc. $REGI.

Over the past year, iShares Global Clean Energy ETF $ICLN outperformed the broader market with +49.1% total returns however the clear-cut winner is $QCLN.

First Trust NASDAQ Clean Edge Green Energy Index Fund ($QCLN)

Cost as of 12.24.20: $70.45
1-Year Trailing Total Returns: 87.0%
Expense Ratio: 0.60%
Annual Dividend Yield: 0.66%
Assets Under Management: $409.3 million
Inception Date: February 14, 2007

$QCLN is a multi-cap fund with a blend of domestic value and growth. The fund includes green energy, solar energy, biofuels, and advanced batteries.

The ETF’s top holdings include Tesla Inc. $TSLA, the electric vehicle maker; NIO Inc. $NIO, the Chinese electric vehicle company; and Solaredge Technologies Inc. $SEDG, a maker of components for photovoltaic arrays.

#5 Blockbuster Gaming ETFs that Never Quits

The Gaming industry has become a juggernaut in 2020, far surpassing streaming, sports and music.

80% of all US consumers “played a video game in the past six months,” according to the latest report from the NPD Group.

Moreover, ESports and online gambling soared as viewership headed home for the pandemic.

You cannot go anywhere without hearing about Call of Duty, the failure of Cyber Punk 2077, the near miss of Assassin’s Creed Valhalla, and the annoyance of Fortnite or ROBLOX.

No benchmark can track the success of online gaming. As such, Google Stadia entered the fray and even Amazon is working on its virtual gaming platform Luna. It is a money-making discretionary streaming beast. If you want to find an ETF to sink a hard bet, this might be your $HERO.

Global X Video Games & E-Sports ETF ($HERO)

Cost as of 12.24.20: $30.83
1-Year Trailing Total Return: 74.3%
Expense Ratio: 0.50%
Annual Dividend Yield: 0.15%
Assets Under Management: $413.7 million
Inception Date: October 25, 2019

HERO is a multi-cap growth fund that focuses on companies that develop or publish video games.

In addition, this fund holds 40 companies which include NVIDIA Corp. $NVDA, the developer of graphics processing units and related hardware; and Nintendo Co. Ltd. $NTDOY, the consumer electronics and video game maker.

BONUS Luxury#6: Backing JETS, Boeing, and Airplanes

The airline industry suffered a catastrophic year from airplane fear to plunging travel due to the COVID-19 pandemic. Hope is right beyond the horizon, which might trigger all the travel miles in late 2021 and 2022. This is likely the buy-and-hold time, for big gains later.

As a result of 2020, airline ETFs might be in order to diversify your exposure to domestic travel as well as aircraft manufacturers, airports, and terminal services.

The top companies include American Airlines Inc. $AAL, Delta Air Lines Inc. $DAL, Southwest Airlines Co. $LUV, and Boeing $BA. Prospects are high and the travel industry is ready for its massive comeback and restructuring.

The only option on the table is the US Global Jets ETF $JETS with 80% of its portfolio, allocated to domestic airlines and companies involved in the aviation industry and about 20% in international companies.

US Global Jets ETF ($JETS)

Cost as of 12.24.20: $22.16
Performance over 1-Year: -37.0%
Expense Ratio: 0.60%
Annual Dividend Yield: 1.93%
Assets Under Management: $2.2 billion

BONUS Lucky#7: Grabbing Dividend Income

Dividends concept. Stack of dollars and calculator.

If you are more risk-averse and your time horizon is short, Dividend ETFs might be up your alley since they include high-dividend-paying stocks.

These high-dividend companies stocks have strong history of dividend increases, and span a range of market sectors.

In short, the top performing dividend companies may be domestic based with international exposure like Johnson & Johnson $JNJ , International Business Machines Corp. $IBM, Coca-Cola $KO, Nike Inc. $NKE, and even Walmart $WMT.

The best-performing dividend ETF in the last 12 months is the Invesco S&P 500 Quality ETF $SPHQ.

Invesco S&P 500 Quality ETF ($SPHQ)

Cost as of 12.24.20: $41.48
1-Year Trailing Total Return: 10.1%
Expense Ratio: 0.15%
Annual Dividend Yield: 1.73%
Assets Under Management: $2.2 billion

SPHQ is a large-cap ETF focused primarily on domestic growth equities. This ETF offers lower volatility in the market, and includes holdings like Apple Inc. $AAPL and Procter & Gamble Co. $PG.

Summary

In the end, I am not saying these ETFs can make you rich over the next 12 months by themselves. However, a consistent and intentional discipline shift from paycheck to debt to paycheck to wealth will benefit you and your family for lifetimes.

Know that, great returns are measured in years. Think 10-yr, 15-yr, and 20-yr cycles of growth and prosperity. Read, Learn how to start Investing in a Million Dollar Portfolio from Scratch before it’s too late.

If these seem too high risk for you with an overvalued market, focus on making the best money management moves that you can today. From lowering your housing footprint by getting roommates to moving away from blind microspending, every bit matters.

Remember, “you do not rise to the aspirations of your goals but you fall to the level of you systems. Automate your wealth and you will get there.“

Invest or Die in 2021 and Beyond

In summation, following the Net Max Financial plan can help you grow by +50% wealth per year. See the framework and the math below. If not, be content by watching others invest and shift their lifestyle while you remain stagnant.

You can get rich quicker by investing smarter.