Organic agriculture

Organic Agriculture

The next time you are out on a walk and notice a humble honey bee buzzing from flower to flower, take a moment to stop and appreciate the importance of the busy little insect. Because its work is at the heart of all organic agriculture.

According to the FDA, “About one-third of the food eaten by Americans comes from crops pollinated by honey bees, including apples, melons, cranberries, pumpkins, squash, broccoli, and almonds, to name just a few.” Pollination is essential to agriculture; without it, many plants cannot produce seeds and fruit, and our dinner plates would look very sparse indeed. 

Unfortunately, honey bees are in trouble. 

[The world needs to double food production by 2050. Here’s how investing in Precision Agriculture can make that happen.]

Beekeepers in the U.S. have been sounding the alarm for years, reporting sharp declines in honey bee colonies for over a decade, and the winter of 2018/2019 saw the biggest decline on record. This sharp decline in honey bee colonies is thought to be caused by several factors, including shrinking crop diversity, habitat loss, insecticides, and parasites. In particular, a widely used group of insecticides called neonicotinoids are coming under increased scrutiny as mounting research demonstrates the toxicity of the chemicals to honey bee populations. 

Farmers apply neonicotinoids to their fields in an effort to prevent pests such as aphids, but end up unintentionally damaging honey bee colonies, which in turn damages crop yields and the surrounding ecosystem as a whole.

Declining honey bee populations in the U.S. are symptomatic of an ongoing conflict in modern agriculture that pits short term profitability against long term sustainability. Spraying a field with herbicides may kill weeds one year, but the weeds that sprout the following year will be herbicide-resistant, and the farmer will have to invest in new and increasingly complex chemical concoctions to stay on top of the evolving weeds. 

In response to the industrialization of modern agriculture, a thriving movement has emerged that emphasizes quality over quantity. Organic agriculture is a process of producing food that focuses on environmental sustainability. The Rodale Institute, a leading organic agriculture nonprofit, considers organic agriculture to be a “vision for working and living in harmony with nature. The result is healthy soil, which grows healthy plants, which make for healthy people. By abstaining from synthetic inputs and encouraging natural systems, organic farmers help create a better future for people, animals, and the environment.”

For those interested in the investment potential of this growing market, there are a few important points to understand.

What is Organic Agriculture?

In the context of the U.S., “organic” is a labeling term that food producers affix to products to indicate that their products comply with the organic standards of the U.S. Department of Agriculture (USDA). The USDA’s organic standards are lengthy and cover many agricultural processes, including crop production, livestock/poultry production, and product handling/labeling. (Learn More: Why logistics matter in agriculture.)

Before a food producer can apply an organic label to their product, USDA inspectors must first certify that the producer is in compliance with the relevant organic standards. In general, the USDA’s organic standards require that food producers use natural processes to produce food. 

With crop production, for instance, one of the organic standards is that the land cannot have had synthetic synthetic fertilizers or weed killers applied to it for at least three years before harvesting an organic crop. The organic standards also mandate that organic livestock and poultry have access to the outdoors year-round, and may only be temporarily confined due to poor weather or concerns over the animal’s health.

Making the transition to organic or going organic from the get-go can be a difficult, expensive endeavor for food producers. It is undeniably cheaper to produce food using synthetic chemicals and industrial processes. 

Environmental benefits aside (which are substantial, if difficult to value monetarily), going organic offers food producers access to a rapidly growing market. Young adults are increasingly focused on food quality when they shop, with a recent YouGov study noting that 68% of millennials surveyed responded that they are willing to pay more for higher quality products. 

For a young consumer with health and environmental concerns on their mind, the choice between an organic tomato costing $2.25 and a non-organic tomato costing $1.50 may not be as obvious as one would assume. In this space, there is significant opportunity.

Why Invest in Organics?

Consumer demand for organic food is booming in the U.S., but domestic supply has not kept pace. The development of precision agriculture has helped, but the shortcoming largely boils down to the fact that producing organic food is more difficult and expensive than producing food via conventional agriculture. 

In an effort to facilitate the transition to organic from conventional while satisfying their customers’ growing demand for organic food, large food companies are increasingly partnering with small producers. Established brands like Annie’s (owned by General Mills) are partnering directly with domestic farmers, eliminating many of the hurdles new organic producers face in bringing their products to market. 

With a consumer base willing to pay more for products they value, and with the support of established companies that recognize organic’s potential, the organic agriculture market is primed for substantial growth and expansion in the coming years.

According to research from the Organic Trade Association, sales of organic products in the U.S. reached $52.5 billion in 2018, up 6.3% from 2017. Sales of organic foods accounted for $47.9 billion in 2018, an increase of 5.9% over 2017 food sales. This increase in organic food sales far exceeded the 2.3% growth seen in non-organic food sales during the same period. 

Figures from 2019 look equally healthy, with Category Partners and Organic Produce Network reporting that sales of organic fruits and vegetables increased by 5.1% between 2018 and 2019, while sales of conventional fruits and vegetables increased by about 1.9%.

These trends demonstrate that consumer interest in organic products is strong. Young consumers are more concerned about their health and the health of the environment than any preceding generation, and these consumers are on the cusp of becoming the most dominant group with respect to consumer spending. 

Organic agriculture represents a unique opportunity in the investment landscape because it offers the potential to serve an undersupplied but growing market with products that are increasingly seen as ethically and environmentally superior to similar products available at lower prices.

How to Invest in Organics

But, for investors, organic agriculture as a category is almost too broad. It’s a trend that impacts almost every aspect of the food and ag industry, but it’s something that very few companies are dedicated entirely to. Every company in the space has an organics program, making it very difficult for investors to get in on this trend directly without investing in a very broad group of companies.

However, investing in a mutual fund or ETF that offers exposure to the organics market can be a good way for investors to access this growing segment of agriculture without having to invest in many companies directly. A search on Magnifi suggests that there are a number of funds available today for those investors interested in investing in organic agriculture.

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today.

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]


Virtual Reality

Our addiction to screens isn’t anticipated to change anytime soon, but with the growth of virtual reality, how we relate to our screens is sure to.

The proof? Headset sales are booming. Over the holiday season, Facebook’s popular Oculus Quest virtual reality headset sold out and is now on a two-month back-order.

In other words, when it comes to virtual and augmented reality, the technology is ready and so are the users.

So, what exactly is virtual reality? 

Virtual reality is a type of technology that “shuts out the physical world,” creating a completely immersive experience in digitally created “real world” or imagined environments. 

[Support the data that’s making Virtual Reality possible. Here’s what investors need to know about Big Data]

This is slightly different from augmented reality, which adds digital elements to our real-life view. Think of Pokémon Go, for example, which digitally plants Pokémon characters around real-life cities and towns for players to physically go and find. That’s augmented reality.

What Can Virtual Reality Do?

Both virtual reality and augmented reality are changing the ways that almost all industries deliver goods and services to consumers.

First, and maybe first to come to mind for most people, is virtual reality’s place in the gaming world. The video gaming industry is anticipated to grow to as large as a $300 billion industry by 2025. Virtual reality will no doubt help to stimulate that growth, transforming the gaming world by dramatically changing the dynamics of how players relate to their games.

After all, games are no longer built like the old Nintendo or Atari platforms. New games allow players to be real participants in the action, and virtual reality is just the next step in this direction.

For instance, the much anticipated virtual reality game, Half Life: Alyx, is set to release a sequel more than a decade after its first iteration. Other highly anticipated virtual reality video game releases include The Walking Dead: Saints & Sinners, The Walking Dead Onslaught, and Iron Man. These games have a ready market and mountains of consumers that have or have yet to order their headsets.

Virtual reality and gaming, yes. But what about virtual reality and spas? Yes, it’s a thing. 

The Four Seasons Resort in Oahu is now offering the world’s first multisensory virtual reality and wellness experience in what it calls the Vessel. And, it’s not alone. Spas across the U.S. now offer similar experiences in a device known as the Somodome, a self-contained meditation pod.

Virtual reality is challenging companies to reimagine how they engage consumers of all kinds. This includes retail, even though online shopping seems to be doing just fine without it. Consider virtual reality shopping. Soon you may be sipping coffee and exploring the various kitchen options from the comfort of your couch thanks to Ikea’s Virtual Reality Showroom.

Beyond consumer goods and services, virtual reality has huge potential to improve training for higher education and corporate entities alike. Walmart is on board, training employees with virtual reality programs that offer new hires the opportunity to experience specific customer situations. The military is also using virtual reality for training purposes, and even the Denver Broncos football team is using virtual reality as a tool for training new and injured players (quarterbacks specifically).

The technology also has the potential to be used for highly sophisticated simulations in the healthcare field. Emmanuel Hospice, a non-profit hospice company, offers patients the ability to leave their rooms with virtual reality-based therapy. Using the technology, one patient went on a virtual trip to Frederik Meijer Gardens and Sculpture Park, and another to Ireland.

The possibilities are endless and virtual reality technology is everywhere. 

Why Invest in Virtual Reality

With all of these different applications, it should come as no surprise that the VR industry is set to grow rapidly. The global virtual reality market is anticipated to reach $120.5 billion by 2026, a dramatic increase from $7.3 billion in 2018. 

And, the market is ripe for investment. As the technology advances, virtual reality is expected to play an increasing role in training and education, entertainment, retail, healthcare, and more.

Not only is the technology required for virtual reality improving, but the costs associated with it are decreasing. Quality virtual reality experiences require both a headset and a powerful graphics card. These two elements have big-name companies like Sony, Samsung, and Facebook, as well as lesser-known companies, competing for market share in each. As virtual reality becomes increasingly mainstream, these companies are poised to benefit. 

Beyond these two primary technology elements, virtual reality is also primed to create new investment opportunities in the industries that adopt it. Whether it’s the next big game, the next big hospital training platform, or something we have yet to imagine, industry-specific virtual reality solutions are sure to create a buzz and further stimulate consumer adoption.

When it comes to virtual reality, opportunity abounds. You can invest in the technology itself, or the products, services, and solutions that it delivers. 

How to Invest in Virtual Reality

Of course, virtual and augmented reality are high-growth, high-volatility sectors, meaning that they can make for risky investments when bought directly. Rather, a search on Magnifi suggests that there are a number of other ways to profit from virtual reality innovation via mutual funds and ETFs that cover this fast-growing sector.

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today.

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.] 


bitcoin

Bitcoin

Globalization is driving the economies of the world toward greater and more profound integration. People across the globe are now connected through vast, complex supply chains that span oceans and continents. 

From the comfort of your home in the U.S., you can log on to Etsy and order a beautiful, handmade blanket from Turkey that will arrive at your door in a few weeks. You do not need to travel to Turkey to purchase the blanket, and the Turkish vendor is happy that their products are available to a global market. 

The growth of these kinds of international peer-to-peer transactions is hindered by the fact that most countries each have a distinct currency that is government-controlled and that generally cannot be spent elsewhere. The process of transferring money between people in different countries can be quite complex as the funds need to pass through intermediary banks along the way. This complexity takes time and adds a cost to the transfer in the form of fees. 

A little over a decade ago, an ingenious new digital currency known as Bitcoin was launched that sought to address these and other global currency problems.

An unknown individual (or group of individuals) going by the name Satoshi Nakamoto invented Bitcoin (and the underlying blockchain technology) and shared the idea in a groundbreaking 2008 paper entitled Bitcoin: A Peer-to-Peer Electronic Cash System. The introduction of this paper states that: “Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.” 

Bitcoin relies on what Nakamoto refers to as “cryptographic proof” (hence, cryptocurrency) instead of trust. This proof comes in the form of Bitcoin’s blockchain ledger, which unlike the ledger of a traditional bank, is open to and shared amongst users in the Bitcoin network. 

As a complete reimagination of the traditional currency and banking system, the transformative potential of Bitcoin is enormous. A decentralized digital currency that is free from government control offers users an entirely new way to move and make money.

For those interested in the investment potential of this innovative new currency, there are a few important points to understand.

What is Bitcoin?

Bitcoin is a decentralized digital currency. It is not backed a government or issued by a central bank, and its value relative to local currency moves with the forces of supply and demand.

As of early 2020, there are roughly 18 million Bitcoins in “circulation,” with another 3 million yet to be added. New Bitcoins enter circulation by a process known as “mining.” People using powerful computers (“miners”) compete with each other to solve complex mathematical problems in a race to verify a new set of Bitcoin transactions. The first miner to do this correctly is rewarded with a certain number of Bitcoins.

Mining is a costly, energy-intensive endeavor, but it is not the only way to acquire Bitcoins – most people simply buy them. The process is relatively straightforward. Start by downloading a digital wallet, which is a kind of program that stores your Bitcoins and payment information. Next, simply go to the Bitcoin website (or an exchange where Bitcoin are traded), link your digital wallet, and select how much Bitcoin you would like to purchase. Once your payment goes through and after the transaction is verified by miners, you will be the proud owner of some quantity of shiny new Bitcoin.

As a decentralized alternative to the traditional banking system, Bitcoin can be bought and sold anywhere in the world where there is an internet connection. 

This is an important point because traditional banking does not adequately function in many places across the world. Take Venezuela, for instance, where hyperinflation over the past few years has led to a rampant devaluation of the nation’s currency, causing food to become extremely expensive and widespread hunger to run rampant. Venezuela’s leaders staunchly refused humanitarian aid from outside countries and slapped heavy fines on incoming money transfers. 

Desperate citizens turned instead to Bitcoin for help. Bypassing the incompetent Venezuelan government entirely, people from around the world sent Bitcoins directly to Venezuelan families in need.

Why Invest in Bitcoin?

As an investment, Bitcoin is undeniably in the high-risk, high reward category. Bitcoin prices have fluctuated wildly over the past several years. A single Bitcoin cost about $1,000 at the beginning of 2017, and by December 17, 2017, Bitcoin hit a peak price of about $20,000. You may recall that there was something of a Bitcoin “frenzy” during this price runup. Alas, the party was not to last, and prices fell sharply throughout 2018 before rebounding moderately in 2019 to a respectable $7,200 by New Years Day 2020.

Volatility aside, it is hard to deny Bitcoin’s outstanding performance when looking at the entire price history. According to data compiled by Bloomberg, Bitcoin posted gains of more than 9,000,000% since July 2010. As a point of comparison, the S&P 500 and Dow Jones each roughly tripled during the same period. 

Past performance is, of course, no guarantee of future results, and radical changes are underway in the cryptocurrency market that will create heavier competition for Bitcoin.

Facebook is planning to launch a digital currency called Libra, and countries such as China, Russia, and Iran are looking to create their own forms of cryptocurrency to circumvent U.S. sanctions. 

Bitcoin is the original cryptocurrency and has been around long enough to work through many of the kinks that have arisen. Interest in Bitcoin is likely to remain high for the foreseeable future, and it will continue to be a potentially highly-lucrative, if risky, investment option for adventurous investors. 

How to Invest in Bitcoin

There’s no arguing the investment potential of Bitcoin and its related technologies. But the fact remains, with that high upside comes the risk of big downsides as well, and Bitcoin prices have been on something of a roller coaster over the last two years. 

However, investing in a mutual fund or ETF that offers exposure to the Bitcoin market and its underlying technologies can be a way to temper some of this volatility. Although there is still no pure cryptocurrency ETF available, a search on Magnifi suggests that there are a number of funds available today for those investors interested in investing in the technology without buying Bitcoin directly.


blockchain

Blockchain

It seems as though every time we turn on the news there are new stories about enormous data breaches. 

There was the massive 2013 Yahoo breach in which all 3 billion user accounts were compromised, and then there was the 2017 Equifax breach that exposed the personal information of 147 million people. 

Data breaches are becoming more widespread and impactful, with 2019 set to be the worst year on record. It is perhaps not surprising that, according to the Pew Research Center, 70% of Americans feel that their personal information is less secure than it was just five years ago. Businesses and governments are tasked with securely storing mountains of complex and highly-personal data, and they are beginning to turn to a novel technology known as “blockchain” to help.

[With new technology comes new risks. Here’s what you need to know about cybersecurity]

Blockchain is a technology solution that solves some of the problems associated with data storage and security. When an organization is solely responsible for maintaining its database, valuable information may be lost in the event of a breach or disaster. A freak hurricane could damage vital data centers (as happened in 2012 during Hurricane Sandy), or an adept hacker could detect a vulnerability in a government’s website and hold critical data hostage (as happened in 2019 in Baltimore, Maryland). With blockchain, data is securely shared across a distributed network in which all parties have access. The nature of the technology is such that damage to one part of the network does not compromise the rest. For this reason, among many others, businesses and governments are turning their attention – and investments – to blockchain.

For those interested in the investment potential of this innovative technology, there are a few important points to understand.

What is Blockchain?

According to the software company SAP, blockchain is most simply defined as a “reliable, difficult-to-hack record of transactions – and of who owns what. Blockchain is based on distributed ledger technology, which securely records information across a peer-to-peer network.” 

The “block” in blockchain describes the data that is entered into the network, while the “chain” in blockchain refers to the chronological sequence in which blocks are entered. Data is approved for entry via consensus of other network participants, and once entered it cannot be changed. In this way, there is a complete, sequential, and verifiable recordkeeping of the network’s data that is available to all participants.

At first glance, this may not seem like a revolutionary concept, but it is important to note that the decentralized nature of blockchain is highly novel and has far-reaching applications. 

An unknown person (or persons) going by the name Satoshi Nakamoto invented the blockchain concept and shared it with the public in a groundbreaking 2008 paper about a proposed digital currency system. That currency system became known as Bitcoin, and the spread of blockchain technology gave rise to a vast ecosystem of other cryptocurrencies. 

While most people only associate blockchain with Bitcoin and cryptocurrency, the technology has much broader applications across a variety of industries. For instance, logistics firms are turning to blockchain technology to modernize their supply chains. Danish shipping company Maersk recently launched a blockchain-powered logistics platform called TradeLens, which it says will provide improved visibility into the movement of shipments around the world. 

Healthcare is another sector that stands to benefit tremendously from the adoption of blockchain technology. As any adult in the U.S. can attest, healthcare records are notoriously scattered from provider to provider. Implementing blockchain technology has the potential to make critical health data more accessible and secure while eliminating barriers that currently stifle communication between doctors, patients, and insurers. 

Data is at the core of any modern organization, and it seems likely that blockchain will be an increasingly important tool in the modernization of data management practices.

Why Invest in Blockchain?

Blockchain is an extremely valuable technology with significant investment potential. 

As noted by James Wester, Research Director at International Data Corporation (IDC): “Blockchain is maturing rapidly, and we have reached an inflection point where implementations are moving quickly beyond the pilot and proof of concept phase.” 

IDC estimates that global spending on blockchain solutions will reach nearly $2.9 billion in 2019, an increase of nearly 88% from 2018. IDC expects annual spending to climb to $12.4 billion by 2022, with a 76% annual growth rate between 2018 and 2022.

Investment in private blockchain companies is also quite robust. In the U.S., for instance, investments reached about $1.1 billion in 2019 – a healthy figure considering recent corrections in cryptocurrency markets.

Big technology companies understand blockchain’s potential and are adjusting their services accordingly. Companies such as IBM, SAP, and Oracle offer blockchain-as-a-service to help businesses create their own blockchain networks. Companies that are prepared to offer innovative blockchain solutions are well-positioned for the coming changes to the data management landscape, and startups researching blockchain solutions are likely to garner significant interest from established companies. These market dynamics are likely to create a rich environment for outside investment.

Governments around the world are also taking notice of blockchain’s enormous potential. The U.S. Department of Homeland Security is investing heavily in blockchain startups because of the technology’s cybersecurity advantages in making digital systems more resilient. The Republic of Georgia recently partnered with Bitfury, a Netherlands-based blockchain technology company, to digitize and migrate the country’s land registry onto a blockchain-based network. Meanwhile, Chinese President Xi Jinping recently announced that China will make blockchain a top priority in the country’s new innovation push, a move that may galvanize more investment and research in the West.

In this space where both business and government recognize blockchain’s potential, savvy investors are well-positioned to capitalize on novel applications of this innovative technology.

How to Invest in Blockchain

But, despite all of this potential and recent growth, blockchain remains a very early-stage technology. It has only existed in its current form since 2008, and the industry that has sprung up around it is even younger than that. With that youth comes volatility, which investors are seeing in the prices of pure-play blockchain stocks. However, investing in a mutual fund or ETF that offers exposure to blockchain can be a way to temper some of this volatility. A search on Magnifi suggests that there are a number of funds available today for those investors interested in investing in blockchain technology without buying shares in the associated companies themselves.

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today.

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]  


3D Printing

3D Printing

At a time in the not too distant future, a patient suffering from organ failure may not need to wait on a donor transplant list in order to acquire a new, healthy organ. If researchers at Wake Forest University continue their remarkable progress, a doctor may be able to simply “print” a new organ for the patient. This treatment may seem straight out of a science fiction movie, but it is grounded in a real manufacturing process known as 3D printing.

3D printing has been around since the 1980s, but it is only in the past decade that the technology has really taken off. Recent advancements in material science and design software have propelled the technology into the mainstream, and an increasing number of innovative companies are adopting the technology to optimize supply chains and address complex problems.

Modern 3D printers are capable of producing objects from a wide variety of materials, and they can quickly print objects that are larger and far more complex than was possible only a few years ago.

3D printing is an essential component of Industry 4.0, a term described by Deloitte as the “new industrial revolution—one that marries advanced manufacturing techniques with the Internet of Things to create manufacturing systems that are not only interconnected, but communicate, analyze, and use information to drive further intelligent action back in the physical world.” 3D printing is helping to drive this new industrial revolution by democratizing the design and manufacturing process.

As 3D printing becomes more advanced and cost-effective, the technology is gaining greater exposure and novel applications are being pioneered left and right. For instance, international nonprofit New Story, in partnership with Texas-based digital manufacturing company, ICON, are using a massive 3D printer to “print” homes for impoverished residents in rural Mexico.

[3D printing isn’t the only new technology poised to change the world. Here’s a look at the investment landscape for Virtual Reality]

Many remarkable applications are being developed in the field of regenerative medicine, such as research at the University of Arizona where shattered bones are being healed by inserting synthetic bones created using a 3D printer. The applications of 3D printing are only limited by one’s imagination, and the transformative potential of the technology is staggering.

For those interested in the investment potential of this rapidly-growing sector, there are a few important points to understand.

What is 3D Printing?

3D printing is a manufacturing process that uses digital designs to create three-dimensional objects. 3D printing is also sometimes called additive manufacturing because the object is created layer by layer, from the bottom up, by adding successive layers of material until the object takes shape.

This stands in contrast to the more common subtractive manufacturing process, in which an object is formed by starting with a large piece of material and removing excess material in order to obtain the shape of the desired object. A laser cutting out a specific pattern on a large metal sheet is an example of a subtractive manufacturing process.

3D printing has several key advantages over subtractive manufacturing. For one, 3D printing can significantly reduce the amount of time between the design and production of a new product. A 3D printer can quickly render a functional prototype for designers and engineers to test, which saves time and money that would otherwise be spent waiting on prototypes created using more traditional manufacturing processes.

Another key advantage of 3D printing is waste reduction. In additive manufacturing, only the material that is needed to create the object is used, while subtractive manufacturing wastes a significant amount of material in the form of scrap pieces and shavings that are removed to shape the object. Even if these scrap pieces can be recycled, there is an added expense in time and money to see it through.

Another enormous advantage of 3D printing is design complexity. 3D printers can produce an object with designs so complex and intricate that it would be impossible to produce using any other manufacturing method. This is not to say that 3D printing and subtractive manufacturing are mutually exclusive. To maximize supply chain efficiency, innovative companies utilize both processes simultaneously and at different stages of the manufacturing process.

Why Invest in 3D Printing?

The 3D printing sector is starting to grow rapidly.

According to a report by Deloitte, sales from large, public, 3D printing companies will exceed $2.7 billion in 2019 and surpass $3 billion in 2020. Deloitte predicts that this segment of the 3D printing industry will grow at about 12.5 percent in both 2019 and 2020, which is more than double the growth rate from just a few years prior.

To account for current growth and projected growth, Deloitte points to several recent industry developments, including large companies entering the market and driving innovation, along with dramatic technological advancements (more 3D-printable materials, faster print speeds, and a larger build volume).

The Deloitte report further notes that: “After decades of development, 3D printing has finally reached a period of sustained growth greater than most other manufacturing technologies. As with so many other new technologies, it is important to ‘think big, start small, and scale fast.’ The next few years are likely to see 3D printing become much more widely used in all sorts of manufacturing, from robots to rocket ships. The ripple effects on industries even beyond manufacturing may be profound.”

And the rise of Big Data analytics is only accelerating this trend, opening up vast new data sets that be used to design and optimize 3D models.

With respect to the 3D printing market as a whole, Mordor Intelligence expects the market to grow to about $49 billion by 2024 (up from about $10.50 billion in 2018) at a rate of about 29.50%. Mordor notes that North America currently holds the largest share of the market and is well-positioned for exponential growth: “With these series of investments, healthcare, aerospace & defense, industrial, and consumer product applications in North America are set to boom over the upcoming years.”

This growth potential is not limited to North America. The Asia-Pacific region is largely an untapped market at this point, and it is projected to grow at the fastest rate over the next several years.

How to Invest in 3D Printing

However, given the fact that 3D printing is a relatively new industrial sector and is still growing, investing directly in the companies that are leading the way can be risky. Rather, investing in a mutual fund or ETF dedicated to 3D printing can be a good way to gain exposure to this fast-growing niche without taking on the risk of a direct investment. According to a search on Magnifi, there are a number of funds and ETFs that access 3D printing.

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today.

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]