Can you invest in outer space, extra terrestrials, and the stars?☄
Running Point and I were asked similar by U.S. News & Word Report — in an article by Tony Dong, “7 Space Stocks and ETFs to Watch,” — regarding investing in emerging industries like space flight, exploration, and tourism, and the risks involved🚀🌌
One step beyond
Trends and thematic investments: We often try to limit or right-size investments in trends that can face flashy headline risk and sensationalism. Nonetheless, good money can be made (and lost) on fads and themes; one needs to watch them carefully👽👾
Thankfully, the field of space ETFs is relatively small — making them easy to compare side by side — including ARK Space Exploration and Innovation ETF (ARKX), iShares U.S. Aerospace & Defense ETF (ITA), Procure Space ETF (UFO), Invesco Aerospace & Defense ETF (PPA), SPDR S&P Kensho Final Frontiers ETF (ROKT), and SPDR S&P Aerospace & Defense ETF (XAR).
Quoted article excerpts are below:
“Thematic ETFs offer easy diversification, convenience and professional management, but often this comes with much higher expense ratios than basic index ETFs, as well as industry-specific risks,” says Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors. “The long-term trend of a theme may be in place, but it may be early in the cycle and subject to the ups and downs of fads, so consider limiting exposure to themes that can face flashy headline sensationalism.”
“When selecting a space-themed ETF, try to examine the underlying holdings,” Schulman says. “Does the ETF contain the kind of company exposure you desire with riskier, up-and-coming shoot-for-the-stars names, or more stable aerospace and defense firms that have space exploration and satellite divisions?”
You need to live in a dome initially, but over time you could terraform Mars to look like Earth and eventually walk around outside without anything on… So it’s a fixer-upper of a planet.
Elon Musk
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