Do you want to know how to invest in the future?

June 4, 2016

What will be the best investments in the future?

Well, it depends on what future we are talking about: there are trends and there are megatrends.

This was the subject of an interesting article that I saw recently in Business Insider.

Last month, experts at the Milken Institute Global Conference in Los Angeles looked at certain megatrends and predicted several economic scenarios for 2040 to help those who want to get ahead.

How will our world be then?

Although 2040 is still a distant reality, some issues predicted by the experts such as an aging population, a growing urbanisation of Africa and Asia, the emergence of China as an economic powerhouse and the beginning of environmentally sustainable infrastructure are already appearing as profitable investments.

What can we learn about investments from the observations made at this Global Conference?

The observations concluded that people are healthier and living longer and in 2040, the Chinese population of over 65’s alone will exceed the entire US population. Factors such as this result in the need to develop and adapt products and services for this older market. Everything from adapting smart cars to ensuring quality care in senior housing are things that investors need to consider; the growing older population is not just a phenomenon in the US but a global one.

From my point of view, the increasingly older population creates waves of opportunities globally. It’s not difficult to predict new purpose built retirement cities around the world for the “ever-young, baby boomers”. The scale will vary from country to country but certainly in China, these cities will need to cater for tens of thousands presenting a radical change in the approach retirement living.

Another phenomenon that must be considered in the coming years is the ever-increasing movement of people from rural areas to the cities – this is especially the case in continents such as Asia and Africa. In regions such as these, both cities and rural areas will have to change, and agriculture needs to become more mechanised. As a result, there will be many more opportunities out there.

One of the biggest economic global powers in Asia and indeed the world is China, but the experts added that, while there are growing opportunities in China’s burgeoning municipal bond market, investments should be treated with caution.

Furthermore, in China, as well as in Singapore, there is another area that stands out and which should not be forgotten in future – environmentally sustainable infrastructure. The projects are generating cash flow with little risk.

How to know which of these megatrends is the most worthwhile?

There is no magic formula- it’s all about timing, keep an eye on them and invest in one of them at the time that suits your money best.