Investable and Disruptive Mega-Trends
Hikers venture into the White Mountains of New Hampshire every year adequately prepared to climb in pleasant conditions, sadly never returning to their families. No sailor enters The Clipper Race around the world absent years of intense mental and physical preparation for good reason, and ‘the winds of the White’s’ have no more compassion on those depending on nature’s kindness than ‘the waves of the world’s great seas’. Myriads of retail investors today rely on Wall Street’s highly-touted ‘60/40 Portfolio’, consisting perpetually of 60% stocks and 40% bonds, a system Warren Buffet, Doc Eifrig, and dozens of other famed investors are warning is a trap in the post-Covid world, and a corpse the financial media is scrambling to resurrect. The coming decade in the financial markets is likely to resemble a Canadian winter front in the White’s, a multi-day event famous for claiming the lives of experienced winter mountaineers. What can you do to not only survive, but prosper in the storm?
Profitable investing involves, among other things, committing capital not to developments one believes ‘should’ be playing out, but to those which ‘are’ playing out, or better yet, to those which soon ‘will’ play out. An investment theme is in motion which is capable of turning a potentially ‘lost decade’ into a very profitable affair for those paying attention, one which will transform the way virtually every American interacts with others, travels, makes purchases, and manages their own health. These emerging and disruptive mega-trends are not necessarily favorable for individuals, or even society, but the people and institutions behind them possess both the power and resources to make them happen, and so they will. The same way Amazon devoured the brick and mortar retail world in the past decade, the following emerging technologies will displace and destroy even the largest corporations which refuse to embrace the world’s new way of doing things:
Robotics
Artificial Intelligence
Battery Technology
Blockchain Technology
Synthetic Biology
Electric & Autonomous Vehicles
Telehealth
The Metaverse and Augmented/Virtual Reality
Renewable Energy
Fintech
E-Commerce
3D Printing
As you consider the above world-altering trends for your own investment portfolio, I would urge you to weigh three things: 1) consider the moral issues at hand, and refrain from violating your conscience, as no amount of money is worthy of that, 2) realize these are all very risky ventures, as all start-ups and developing industries are, and allocate a minute portion of your investable capital to this investment theme, and 3) stay diversified within each new industry, as most competitors won’t survive; virtually none of Amazon’s early competition exists today.
I’ll close with two very exciting concepts: 1) it will not require a large investment in the companies that end up dominating these new market sectors to meaningfully impact your overall rate of return in a decade that will otherwise, at best, be difficult for most investors, and 2) the stock price of nearly every company in every one of these industries has plummeted catastrophically in the recent sell-off, and will likely offer great entry points when the present bear market concludes.
Think about it, Shaun.
"But you, Daniel, shut up the words and seal the book, until the time of the end. Many shall run to and fro, and knowledge shall increase.” ~Daniel 12:4
The opinions voiced in this material are general, are not intended to provide specific recommendations, and do not necessarily reflect the views of LPL Financial. The economic forecasts set forth in this commentary may not develop as predicted.
All investing involves risk including the possible loss of principle. No strategy ensures success or protects against loss. Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.
All performance referenced is historical and is no guarantee of future results.
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance.
https://www.fivestarprofessional.com/spotlights/90982
Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012/2022 Five Star Wealth Managers.