Investing For Dummies

Investing For Dummies – Megatrends (part 1 of 3)

When I am thinking to what trend or company invest next, I always think long term. Good advice from Warren Buffett is to think what company or trend will exist even though you would close your internet for the next 5 years. One of my methods find suitable companies or trends is to go thru megatrends and how I can benefit from those.

So, I decided to create a “megatrends in 15 years” -blogpost series which will include 3 posts and today I will share post number #1. Totally, I will describe 9 megatrends in 3 posts. I try to figure out what you as investor or as a worker can do and benefit from the situation.

Megatrends #1: Demographics

Mainly due to new technology and development in medicines will cause people to live longer. Also, part of the trend is lowering birth rates in western countries. This will mean that we have more elder people than nowadays. This change in mix will cause challenges to pension systems and healthcare.

In 2030, we will have over one billion people who are 65 years old or older (13% of world population). Compared to situation today it would mean increase of 62,5%.

megatrends
Source: Forbes; “Overpopulation Isn’t The Problem: It’s Too Few Babies” – Article

Conclusion:

  • The age of retirement will increase if you don’t do anything for the situation
  • Government might increase the tax rates, because there is less tax payers
  • This will provide good investing opportunities
    • Healthcare REIT’s
    • Medical companies (like Pfizer)
    • Hospice companies
    • Companies which offers care services (like Attendo)

Megatrends #2; Rise of middle-class

By year 2030 the size of middle class is doubled. Today around 30% people are in middle class (earning 10 to 100 USD per day). In 2030, the number is 60%.

This is mainly caused by rising incomes and expectations in Asia-Pasific region. It is estimated that size of middle class in year 2030 in this region is 2,5 bigger than all the other combined. Today size is around same level than in Europe.

megatrends
Source: European Union Institute for Security Studies, 2011

Conclusion:

  • People in China and India are likely to buy more expensive houses, cars and gadgets.
  • New emerging markets will appear; Nigeria, Indonesia, Myanmar and etc.
  • New services need to be created for new middle class
  • This will provide good investing opportunities
    • Healthcare REIT’s
    • Medical companies (like Pfizer)
    • Technology companies
    • Real Estate companies

Megatrends #3; Technology development

After the internet, everything has changed a lot, because internet makes trends come and go a lot faster. And when the speed of access to information and communication increases, so will the change. So, it comes all the time harder to think which company or technology breaks through.

The next big thing what comes to internet, probably is the internet of things (IoT). Okey, this has come already to the biggest thing for many company, even for the “old ones”, like Intel. Also, there might be some other spin off’s, like how we travel or how we manufacture things in the future.

Unlike some other trends, there are no clear indications of technology development directions.

Conclusion:

  • Picking stocks with clear advantages comes harder
  • You need to acquire more personal skills to increase your value (meaning you will get more salary)
  • Working periods in same company will decrease and most of us will become “consults” or temporary work-force
  • This will provide good investing opportunities
    • Companies offering consults
    • ETF’s which are investing in IoT companies
    • Companies offering data services

Next posts will be megatrends #4 to #6. So, stay tuned.

Regards,

Matt

 

Sources:

Forbes; “Overpopulation Isn’t The Problem: It’s Too Few Babies” – Article

European Union Institute for Security Studies, 2011.

KPMG; Future State 2030

Please follow and like us:
RSS
Follow by Email
Facebook
Google+
http://freedomsearcher.com/2017/10/18/investing-dummies-megatrends-part-1-3/
Twitter
Pinterest
Pinterest
LinkedIn