Investing For Dummies

Investing for Dummies – Megatrends (part 3 of 3)

Everything needs to become to end. So, today I will present last three megatrends. If you haven’t read the previous releases about megatrends, please check those out here:

Megatrends; part 1 of 3

Megatrends; part 2 of 3

Like I have said in my earlier posts, one of my methods find suitable companies or trends is to go thru megatrends and how I can benefit from those. Hopefully, you have checked the first two posts about the trends, and you have thought how you can benefit from those. But, here is more stuff for you to think about:

Megatrend #7: Climate Change

freedomsearcher megatrends

Rising emission levels are causing climate change and changes in the environment. There will be more extreme or unpredictable weather, and this will have a massive impact on world GDP (could reach up to 1% of world GDP per annum). Climate change will cause rainforest to dry up, ice melting and extinction of animals. It is estimated with a warming of +3 Celsius 200 million people will need to relocate due to rising sea levels and floods.

Conclusion:

  • People living in countries with lowish grounds like Netherlands, Maldives, etc. need to relocate themselves.
  • Government needs to find ways to limit CO2 emissions
  • Climate change will provide good investing opportunities
    • Investing renewable energies

Megatrend #8; Resource Stress

freedomsearcher megatrends

Combination of the population, economic growth, and climate change will put stress on natural resources, like water, food, and energy. It is estimated that increasing amount people living in middle-class and increasing population, in general, will need 50% increase in food production and with today’s water supply we will have 40% gap between supply and demand by 2030. Also, the energy demand will increase by 40% by 2030.

Conclusion:

  • Enormous pressure for food and water production
  • New solution providing more energy or increasing energy prices
  • Investing opportunities:
    • Cost of the food and arable land will increase
    • Energy sector
    • “water” companies and companies investing in water resources (we will run out of the water more quickly than oil if no new ways providing water to new customers cannot be found.)

 

Megatrend #9; Urbanization

freedomsearcher megatrends

66% of people will be living in cities by 2030. The number of megacities will double compare to today, and 2 billion will be living in slums. Urbanization will put massive pressure on cities how they will organize housing, water, and energy for all the citizens. Most of this urban growth will happen in developing countries, and it will increase humans impact to the natural environment.

Conclusion:

  • Instructure of current cities needs to be renewed to support growing population
  • Public transport needs to be developed
  • Development of government services like healthcare, etc.
  • Urbanization will provide good investing opportunities
    • ETF’s investing in emerging markets
    • Companies which can benefit from urbanization and are acting in emerging markets

This blog post will be the last post of megatrends. Hopefully, you as an investor can benefit from the postings, and if you have ideas or needs to what you want me to write about, please don’t hesitate to drop me a message.

Regards,

Matt

 

Sources:

KPMG; Future State 2030