What Long-Term Investors Need To Know About The Metaverse

If you’ve been paying attention to the news lately, you’ve heard a lot about virtual reality (VR) and its potential implications for the future. VR technology allows users to experience a simulated environment through sight and sound — among other senses.

While there are already a few VR headsets on the market, many experts believe that the technology is still in its early stages and will continue to evolve.

Some believe that VR could eventually replace traditional media like television and movies. Others believe the use of virtual reality extends to more critical purposes like training surgeons or teaching students. No one knows what the future of VR holds, but one thing is for sure — it’s worth keeping an eye on.

Investors always need to look for new opportunities, and there’s no opportunity more exciting right now than the metaverse.

What is the Metaverse?

It is hard to give the metaverse a set definition as it is still evolving. In its simplest form, it is a shared virtual environment. It is an outgrowth of the internet we see today with a highly diverse set of capabilities. It would contain more than apps on laptops or phones and extend into the world of virtual reality. As an example, teachers can use the metaverse to create a completely immersive learning style. Instead of sitting at your desk for a lecture about oceanography, you could experience a lesson on undersea life firsthand with a virtual reality headset.

The metaverse links the physical economy to the digital economy and paves the way for cryptocurrency to boom. There will be commerce, of course.

Growth of the Metaverse

The metaverse shows a rapid growth pattern due to the involvement of prominent stakeholders, including several dominant companies from multiple industries. Recently Facebook changed its name to Meta, which shows how invested the entire social media industry is in this new domain. Other big names that are entering the playing field are AppleAAPL
, Nvidia, Disney, and NetflixNFLX
.

Digital property and non-fungible tokens (NFTs) such as Sandbox and Upland are a part where players from the crypto world include coin bases Paypal and Alipay.

Due to the active involvement of such prominent players, the metaverse seems to have unlimited growth potential. The market was worth $478.7 million in 2020, and experts expect it to grow to $800 billion in just four more years.

The industry has received a $10 billion investment just from Facebook. The market is expected to grow by 13.1% every year. A survey shows that 74% of adults in the United States have joined the metaverse or are considering joining it.

The Metaverse is Here to Stay

The metaverse has received massive investments from companies serving as significant stakeholders in the internet as we see it today. The current trend shows an increase in investment from both companies and users, as both parties are increasingly active.

The statistics show the large amounts of investment the industry receives and that it comes from stable companies with adequate backing to support their investment, a testament to how the metaverse is not a short-term fad or project. It’s here to stay.

Analysts expect the industry to morph the outlook of business and communication as we see it today. In reality, the metaverse already exists in a pre-developed form.

Lessons from Existing Technology

The development curve we are witnessing today is not new. We have seen this trend before with cameras, mobile phones, and the internet. Let’s take the example of the internet.

By 2008, the internet had developed significantly. However, its role was not as central as it is now. The internet was just something you could use for recreation. However, it quickly became a key player in all world operations. During the initial growth stages, it feels as if the developing industry is unnecessary, but a repeating pattern shows how it quickly changes the way the world operates. Simply put, Amara’s Law states, “Most people overestimate what they can achieve in a year and underestimate what they can achieve in ten years.”

We have seen this pattern with multiple emerging technologies. As new technology becomes a reality, it goes through an early adoption phase to find its ideal placement in our world, then grows exponentially.

Notable Metaverse Stocks

How can you take advantage of the opportunity to invest in the metaverse before it starts its rapid growth? You can invest in many companies that have a direct or indirect relationship with the metaverse.

This list includes:

• Roblox (RBLX)
• Match Group (MTCH)
• Take-Two Interactive (TTWO)
• Nvidia (NVDA)
• Unity Software (U)
• Autodesk
  ADSK
  (ADSK)
• Microsoft
  MSFT
  (MSFT)
• Apple (AAPL)

There are many others out there too, and many more will be founded and become available for trading in the coming years. You will likely even see some companies pivot so they can be part of this industry like we saw with RIOTIOT
and Long Island Iced Tea.

A word of caution: just because a company is involved with the metaverse doesn’t make it a wise investment, as you are about to see.

What Would a Financial Advisor Say About Investing in the Metaverse?

Before investing money in the metaverse, you need to take a step back and consider how owning one or more of these companies fits into your overall investment plan.

If you buy something that doesn’t fit your long-term investment objectives, you can cause much damage to your portfolio and financial position.

Think of the investing experts you see on television that tell you a particular stock is a good buy. It will only be a good buy if it makes sense for your goals, risk tolerance, and overall strategy. For example, suppose you are retired and living off the income of your portfolio. In that case, your investments produce income to help you get by financially. Because of this, investing in the metaverse probably doesn’t make sense for you, as it’s in early development and your returns may not materialize for a number of years.

Compare this to another retiree with $5 million invested. They can take a small percentage of this money and invest in one or more of these stocks without much risk.

With regard to timing, investing is like a party, it’s better to show up early than late. Getting in early might be dull and awkward at first, but it is generally essential as it allows you to buy at a low price. It is better not to see much price movement for days, weeks, or even years than to miss the run up.

Investing in the Metaverse

Knowing which stock(s) to buy when building out a metaverse portfolio quickly returns to understanding the goal. Is your investment a long-term play? If so, investing in Meta Platforms, Nvidia, and Microsoft all make good sense.

You could also consider Snap or Match Group if your investment is more speculative. After all, people in the metaverse might get lonely and will unquestionably crave both community and relationships.

You could even combine these with a mix of solid companies that will be around regardless of whether or not the metaverse scales as the speculators say.

To make investing in the metaverse easier, consider a Q.ai investment kit focused on technology, which builds portfolios based on 5 or more securities that would likely include stocks, mutual funds, ETFs and other investments, so you too can invest like the ultra-rich.

Final Thoughts

With some additional understanding about the metaverse, it will be easier to see how the virtual environments scale, which companies have invested, and what the metaverse intends to be. Not only does this provide investors with confidence but also further aids in helping them decide where and how to invest.

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