How Can You Invest in Space Technologies – How to Choose a Good Company?

The space industry has grown massively in popularity over the past couple of years. And being in the spotlight made this sector an appealing one for investors as well.

So, if you’re on the lookout for a new investment form, this is the best time to invest in space. It’s definitely a growing industry, and its novelty means more options and ways to gain income. 

As the space industry expands, there’s huge potential to be part of the movement and benefit from arising opportunities. So, if investing in space stocks sounds like a good idea, and you want more info on the topic, you’re in the right place. Keep reading to discover useful information on how to invest in space, the best space companies to invest in, and everything in between.

Why Do So Many People Invest in the Space Industry?

If you’ve watched the news, it’s obvious that the new space race makes this industry a very appealing one. Actually, it has the potential of becoming the main investment sector worldwide. The estimates show that projected revenues in the space sector could exceed $1 trillion in the next 20 years. Therefore, it’s no wonder that there’s an increased interest as well as a wave of funding for SpaceTech startups.  

There’s no denying that space investment is a good idea, and there’s no better time like the present to start doing so. There’s plenty of money already flowing into tech companies focusing on space. And all this attention drives further growth to provide a great climate for profit.

How Can You Invest in the Space Sector?

If you are wondering how to invest in space stocks, there are several answers to that question. We’re analyzing the top options you can consider to invest in space companies.

  1. Pure play – this way, you invest in a company focused on a specific industry or niche. SpaceX and Blue Origin are perfect examples of such companies, and it wouldn’t hurt if you were a billionaire with a passion for space. 
  2. Direct Investment – the method with the greatest potential when it comes to profit, direct investment also comes with an equal amount of risk. Buying shares requires careful research to identify the top space companies to invest in. Direct investment can be used with companies like Virgin Galactic and Aerojet Rocketdyne Holdings, which have gone public and sell shares.
  3. ETF – short for Exchange Traded Funds. This way of investing in space exploration comes with the advantage of automatic diversity. ETFs usually contain multiple companies, so you’re putting your eggs in various baskets. Some of the biggest ETFs in the space industry are Ark Space Exploration and Innovation ETF (ARKX), Procure Space ETF (UFO).
  4. Venture Funds – a good option for individuals that intend to invest massive amounts. There’s no shortage of space investment funds, and some of the most popular are Space Capital, Skyrora Ventures, and Seraphim Space.
  5. Related Fringe Investments – when looking for top space companies to invest in, your attention shouldn’t go only to new businesses. Well-established companies are in the game as well and play a big role in the ecosystem. Consider companies like Boeing, Lockheed Martin, or Honeywell when researching space investment stocks. 

What Space Company to Choose for Investing?

Now that you know the basics of how to invest in the space industry, you may be eager to know if there’s a way to find those companies with great potential. And, as much as we want to help our readers in that direction, there’s no secret recipe to apply. 

One should always focus on the domains and niches with booming potential. Since possible breakthroughs are anticipated in aerospace, defence, telecom, and cargo delivery, these sectors should be a good place to start. The industry is still in its early stages, and there’s no telling where the next breakthrough can come from.

What are the Main Obstacles for Investors?

With so many opportunities, space stocks to invest in, and an industry that is growing incredibly fast, you may be tempted to overlook the precautions one needs to take into consideration when investing. Make sure you have a broad understanding before you invest in space travel, as it’s easy to get over-optimistic. Plus, there’s always the possibility of overhyping the industry, which could lead to events similar to the tech bubble in the early 2000s. There’s also the case of space start-ups that need to prove they can obtain profitability. While everything sounds good on paper, it’s a demanding industry that can lead to some high-profile collapses like the ones of Iridium, Teledesic, or Globalstar. 

Another downside that should be voiced is that even with the best space investments, investors need a lot of money to get started. Furthermore, the space tech industry isn’t one that delivers results quickly. That’s why it’s easier for a space investment trust to get involved, as they can handle longer periods before results pop up. 

So, Should One Invest in Space Tech?

Since we’ve explored various answers for how to invest in space companies, it makes sense to also explore whether you should do it or not. And while it’s definitely an opportunity to pursue, the risks can’t be overlooked either. One thing is certain, don’t invest in space tech if your aim is to get profit fast.