More North Korean Shenanigans = More Reasons to Embrace Defense

Americans marked the Fourth of July holiday by eating hot dogs and hamburgers, setting off fireworks and lighting sparklers, enjoying countless parades from coast to coast, and otherwise celebrating our nation’s independence.

North Korean president Kim Jong-un marked it by launching the country’s first Intercontinental Ballistic Missile, or ICBM.

The Hwasong-14 missile flew almost 600 miles before landing in the ocean between Korea and Japan, and the test was accompanied by harsh, mocking rhetoric out of Mr. Kim.

In response, our top military official in the region General Vincent Brooks said that “self-restraint” was “all that separates armistice and war.” We later test-fired several shorter-range missiles in a show of force with our South Korean military allies.

Frankly, I’m growing more and more worried by the day. I certainly don’t see an easy way out, and neither does anyone else.

No one wants a shooting war to break out. That could lead to thousands … if not tens of thousands … of casualties. But it’s not like years of direct talks, indirect dialogue, tighter sanctions, or wishing the problem away has worked.

And with Mr. Kim continuing to cross a series of “red lines” with each new round of nuclear and missile tests, the risk of conflict is clearly going up.

Many regional players are concluding the best of bad options is to increase their threat deterrence and defense capabilities.

Japan is reportedly looking into the purchase of missile defense systems, including the Terminal High Altitude Area Defense (THAAD) and Aegis Ashore offerings from Lockheed Martin (LMT, Rated “B”). The country may also purchase more offensive weapons, including Tomahawk cruise missiles from Raytheon (RTN, Rated “A-”).

Meanwhile, the Trump administration recently approved the sale of $1.4 billion in various missile, torpedo, radar, and other systems and components to Taiwan.

That move follows other recent deals to sell American defense products to various friendly and allied nations in Europe and the Middle East.

The latest developments underscore a theme I’ve harped on repeatedly throughout 2017: Defense ETFs and defense stocks are some of the surest investments in a world fraught with uncertainty.

We may not know whether economic growth will accelerate or decelerate … whether Trump’s infrastructure, tax, and regulatory plans will pass or fail … or whether oil prices, interest rates, and the U.S. dollar will rise or fall.

But you can be darn sure that defense spending both here and abroad will keep ratcheting higher right alongside global tensions.

That brings me to the Defense & Cyberwarfare ETF Screener I just built. It shows the name, ticker symbol, and Weiss Rating of each of the major defense ETFs in the market.

I also included data on total assets, and 1-year and year-to-date total returns. Finally, I listed the major ETFs that track the S&P 500, Dow Industrials, and Russell 2000 for comparison’s sake.

Data Date: 7/5/2017

You can see that all five of the dedicated defense and cyberwarfare ETFs are outperforming the SPDR S&P 500 ETF (SPY, Rated “B”) and iShares Russell 2000 ETF (IWM, Rated “C+”) on a year-to-date basis.

Four out of five are also beating the SPDR Dow Jones Industrial Average ETF (DIA, Rated “B+”). The performance figures look very solid over the past 12 months, too. I urge you to consider fortifying your portfolio with one or more of these defense ETFs.

Or better yet, download a copy of my comprehensive investor intelligence briefing American Arms Bonanza: How to Profit as Trump Spends Trillions to Make Our Military Great Again right away.

The report goes into great detail on the investment potential in the defense sector. It also “names names” of individual defense stocks with the strongest fundamental and technical profiles.

What’s more, I just put the finishing touches on some critical updates to the report – including the addition of a new sector play that’s loaded with profit potential.

So don’t wait. Click here to get this just-updated version today.

And above all, remember this: No one wishes for more military conflicts. But as investors, we have to make choices and decisions based on the world we live in, not the world we wished we had.

I believe a little preparation and planning will result in much greater potential returns, come what may.

Until next time,

Mike