The Advisor’s Next Duty

These conversations will be new for you – and your clients

Ric Edelman: It's Tuesday, August 15th. 6 million Americans have Alzheimer's disease. That number is expected to double over the next 25 years. That will cost our country $1 trillion a year. If you're a woman, if you're black, if you're Hispanic, you're more likely to get Alzheimer's. And now you're also more likely to get Alzheimer's. They say if you have high blood pressure or high cholesterol or a sleep disorder, there's a sleep disorder called RBD, REM Sleep behavior disorder.

It's a sleep problem where you physically act out part of your dreams while you're sleeping. 97% of the people with RBD develop dementia or Parkinson's disease. It's kind of like sleepwalking movements, like thrashing your arms around or kicking your legs. Those are symptoms of RBD. It affects 1% of the population and there are different types of RBD. The first is the most dangerous idiopathic RBD. This is when the disorder happens, out of nowhere. Experts think it most often leads to degenerative diseases like Parkinson's and dementia. 97% of the people who have idiopathic RBD will get Parkinson's or Lewy Body Dementia or MSA, multiple system atrophy within 14 years of diagnosis.

Fortunately, drugs are finally becoming available after 40 years and tens of billions of dollars are trying. We're now starting to have treatments available. The FDA recently approved Leqembi. Now Medicare says they'll pay for it. Wall Street says Leqembi will generate $7 Billion in annual sales by the end of the decade. But the drug is really expensive, $27,000 a year. That's why they're going to generate $7 Billion of sales. If Medicare pays for all 6 million Americans who have Alzheimer's, the cost will be 1% of the entire Medicare budget for just one drug.

And there's another drug that might be coming soon. Donanemab. It's from Eli Lilly. It's still experimental so far, but so far it's showing that it slows memory loss. Researchers are learning that the sooner that Alzheimer's patients begin treatment, the better, especially when symptoms are mild. So we remain hopeful that you're not going to get Alzheimer's or dementia or Parkinson's or any of these other deadly, dangerous diseases. In the meantime, while we're waiting for science to solve the problem, we need to do everything we can to prevent all these diseases. And that means emphasizing our diet, exercise, stress, sleep and relationships. These are conversations you as a financial advisor need to be having with your clients. If all you talk about with your clients is money and you're not talking about diet, exercise, stress, sleep and relationships, you're doing your clients a disservice.

You know, social media has pretty much transformed everything. How we entertain ourselves, how we communicate, how we shop. 5 billion people worldwide use social apps, which means you too. The average person spends 2.5 hours on social platforms every day, and there are the big, huge established sites Facebook, Instagram, YouTube, TikTok, Snapchat, WhatsApp. But new ones are popping up every day. Mark Zuckerberg's Meta just recently launched Threads as a competitor to Twitter sorry, X, demonstrating how new this stuff is always being. 

And just in the first week of Threads, they signed up 100 million people, making it one of the fastest growing apps of all time. People aren't just using social media to talk. You're also using it to buy. Spending on social media platforms is now $700 billion. It's going to hit $6 trillion by the end of the decade.

Roblox, the big gaming platform, they've got 70 million daily users. That's up 22% over last year. Facebook already has 3 billion daily users. Where are all these people coming from? They're coming from television. The time spent watching TV is down 17% over the past year. Newspaper readership, of course, is down, too.

But meanwhile, half of Gen Z spends more than three hours a day online. And wherever there are people, there are advertisers. Spending on digital ads is a $600 billion market. It's rising 10% this year. And generative AI is going to be a big driver for growth in all of this. The companies are all developing AI to create personalized content for you. They'll create targeted ads created just for you and chat bots for small businesses will become affordable and really effective. The conclusion: you can expect outperformance in social media compared to the rest of the stock market.

There are risks associated with investing in social media companies, for one thing. 85% of the world's population already has access to social media. How much more potential growth is there, really? And social media is now very competitive. If people are already spending 2 or 3 hours a day online, how can they possibly spend even more? And what happens if there's a recession and companies cut back on their advertising? So nothing is a slam dunk, not even exponential technologies. 

But if you look at stock prices, it looks like any prices are pretty favorable right now to investors. Nobody thinks social media is going to lose long term to TV or radio or newspapers. Instead, the tech is continuing to innovate thanks to crypto and AI, users can now create and own their own content making money while they're online. This was never possible before and it's all just getting started. That is a huge opportunity for growth and people are relying on social media for more and more.

Today, a third of all product searches begin on social platforms, not retail sites. Video commerce via live streaming on social channels, that's a new global trend. Social gaming is growing 16% a year. People are starting to use their social media accounts to send money to each other.

Given all this, the long-term outlook for social media is looking pretty bright. If you'd like to add this sector to your client portfolios, take a look at the Global X Social Media ETF. The symbol is SOCL, Social. It tracks the Solactive Social Media Total Return Index, passively managed. The Global X Social Media ETF is the first and only pure play social media ETF on the market, so you can learn more about it at Global X ETFs.com. And if you're an investor, ask your financial advisor about it.

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