How Can You Play This Arms Race?

The United Nations and other allied states around the world have been supporting Ukraine with military supplies since the very early days of the war. With the war in Europe still raging more than a year after it began, allied munitions stockpiles and military supplies are starting to get thin.

But, at some point, these countries' reserves will reach a depleted level they are no longer comfortable with and be forced to restock. Let's be honest; that point has already come and gone.

So today, countries in Europe and America are not only still giving Ukranie military aid, but also replacing their arms.

But something similar is also occurring in Asia, as China continues with aggressive talk pertaining to Taiwan. Furthermore, China has been heavily spending on its own military and set its defense spending growth at 7.2% in 2023, in line with where it was in 2022.

Even here in the U.S., the projected 2024 budget for defense spending came in at $842 billion, or $26 billion higher than where it was in 2023 and more than $100 billion higher than in 2022.

Even if the war weren't taking place in Europe today, there would likely be an arms race around the world, and many believe it will only get worse since geopolitical tensions are still brewing in Asia.

So, how can you play this arms race?

Buy Defense and Aerospace Exchange Traded Funds and relax.

Not sure which ones to buy? Let's take a look at a few.

The first ETF I would look at is the iShares U.S. Aerospace & Defense ETF (ITA).

ITA is the largest Defense and Aerospace ETF, with just over $6 billion in assets under management. ITA also has a reasonable expense ratio at 0.39% and has had a solid performance over the last few years. ITA is up 4.32% year-to-date but more than 14.9% annualized over the previous three years. ITA also has 100% of its assets invested in U.S. companies and has 37 holdings. Continue reading "How Can You Play This Arms Race?"

Apple Just Entered the Space Race

Over the past few years, many big technology companies have entered the space race, whether it was Amazon's (AMZN) Jeff Bezos with Blue Horizon, Tesla's (TSLA) Elon Musk with Space X, or Alphabet's (GOOG) satellite internet service, which will be competing with Space X Starlink internet service.

Now the newest technology company to enter space is Apple (AAPL), but in a slightly different way than the others.

On September 7th, Apple released its newest iPhone, the iPhone 14. One of the key features of this new device is the Emergency SOS via satellite feature. This feature allows iPhone 14 owners to contact emergency services via satellites in an emergency when the individual does not have traditional cellular telephone service.

This feature could be a game changer during natural disasters and cell towers are knocked out. Those in need of help will be able to contact first responders with their location, health status, and other pertinent information to help save lives.

Apple is subcontracting the satellite service with a company called Globalstar (GSAT) which already has a network of satellites in outer space for which Apple iPhone 14 and newer phones will be able to access.

The Emergency SOS satellite service will be free for the first two years of owning the iPhone 14; after that time, there will be a price associated with the service, but those details are unknown now.

With more and more of the major technology companies entering space in some form or fashion, it is not hard to see that aerospace technology and the companies currently operating in that industry will benefit from the shift.

That is why I believe you should consider investing a small portion of your portfolio in the aerospace industry. And one of the best ways to gain broad access to any sector is using exchange-traded funds. So, let us look at a few ETFs you can own today, which will give you access to the aerospace industry. Continue reading "Apple Just Entered the Space Race"