3 Important Trends In Investing You Should Take Note Of
As investors, we should attune ourselves to the latest trends which will impact our society for years, or even decades to come. These trends should be enduring and sustainable, and therefore allow us to look into companies which can leverage on them to grow their businesses over the long-term. In this article, let us look at three current trends and also how we can pick investments which hinge on them:
The first trend is the emergence and explosive growth in electronic commerce (e-commerce), which is rapidly replacing the practice of shopping in physical retail malls. This shift away from brick and mortar stores has resulted in many malls’ occupancy rates falling, and this trend has begun to manifest itself more obviously during the last 4-5 years. Even supermarket and hypermarket chains are offering free delivery if you order above a certain amount through their e-commerce portals.
As investors, it, therefore, makes sense for us to sift through the many companies which have sprung up like mushrooms to take advantage of such shifts, to see which would be suitable as an investment. It’s important to select a company with the financial muscle to make continual investments to have the updated infrastructure and systems. This would enable it to stay ahead of the pack and retain market leadership.
The second clear trend is that of ageing populations, especially in developed economies such as Japan. As birth rates decline due to affluence and declined desire to get married and bear children, many countries find that their populations are shrinking. This has also been termed the “silver tsunami”, and it will result in a greying population in need of more medical care and attention.
Healthcare companies which cater to aged care, mobility and geriatric needs would be the beneficiaries of this trend, and the astute investor would be doing himself a favour by selecting the best companies in each sector to own.
The final trend relates to Internet of Things (IoT). With rising connectivity and proliferation of smart devices such as mobile phones and tablet computers which can hook up to the Internet, IoT is simply a term which refers to the integration and interaction of appliances and equipment around us through the use of a single controller or device. Such technology even extends to self-driving cars, which are in their experimental testing phase now. For this technology to work, it would have to use sensors mounted on streets, lampposts and buildings to allow the car to navigate on its own, without human intervention.
Companies which manufacture sensors and microchips are tagging on to this mega IoT trend, and could be a logical consideration for investment.