China recently launched its third and most advanced aircraft carrier, the Fujian; it pains me to say it, but the Fujian is considered by some experts to be superior to U.S. aircraft carriers, asserts Tony Sagami, editor of Weiss Ratings Daily.
China is ahead of the U.S. in most military measurements, except for military aircraft. However, the future of aerial combat will be with unmanned military drones, so the future of America’s aerial superiority is untenable.
Even more alarming is China’s new hypersonic missile, which flies at five times the speed of sound (3,835 mph) and is capable of hitting any city in the U.S.
I’m not suggesting that World War III is around the corner, but I’m confident there will be a tidal wave of new U.S. military/defense spending to catch up to China.
Did you know that the U.S. is constructing a new military facility on the Northern Mariana Islands? Or that it’s upgrading and expanding military bases in Guam and Australia?
Meanwhile, Route 495 is a 60-mile highway that encircles the District of Columbia. Referred to as the Beltway, it’s home to hundreds of companies that feed off government funding. Defense companies employ a revolving door of retired congressional, White House and Pentagon officials that work or serve on their boards.
Sleazy? Perhaps. Although from an investor’s standpoint, they’re cash machines and some of the most reliable, consistently profitable companies in the world, especially the defense contractors.
I don’t think the world realizes how dangerous a powder keg we’re sitting on. With bombs dropping on Ukraine and tensions between the U.S. and China higher than ever, this may be a great time to invest in defense stocks.
Now, the easiest way to invest in defense contractors is through focused exchange-traded funds such as: iShares U.S. Aerospace & Defense ETF (ITA); SPDR S&P Aerospace & Defense ETF (XAR); and Invesco Aerospace & Defense ETF (PPA)
These ETFs have holdings like Raytheon Technologies (RTX), Lockheed Martin (LMT), General Dynamics (GD), Northrup Grumman (NOC) and Boeing (BA).
The military industrial complex is real and super-profitable. Defense and military stocks will explode higher in this politically charged climate, and now is the time to consider adding firepower to your portfolio.
