Trends investors should watch out for in 2016
Investors, better have your news apps ready. Economic observers and trend watchers say that disruption, changes, and emerging areas are the things to watch out for in 2016. A company may boom, and a product may bust at the tip of a hat. It would be wise then to have business-finance apps like BBC News, Born2Invest, CNN, and the Wall Street Journal permanently etched on your cell device screens.
The Institutional Investor’s take: Be conservative, as returns may be low, given the volatility in the market in August 2015. Return dispersion and volatility will also accelerate. Because what is firm today may be shaken tomorrow, it is vital to keep checking the news, financial and business sites and apps for the latest information.
On the other hand, Sydney Morning Herald gives its own forecast: Investors should watch the US currency closely. American economists have become quite optimistic, given the US Federal Reserve’s announcement that the interest rates had risen. The currency might be getting its strength back. The forecast also notes that China will still be a major player, despite the news of its stock fluctuation in 2015. Its growth rate has been registered at seven percent.
Institutional Investor also points out that demographics of the increasingly younger generation will become more important to businessmen, product and service providers, and ultimately, investors. Europe and Japan have an aging population while Asia’s young adult market is growing significantly.
In relation to the age demographic, both forecasts emphasize that the latest innovation can impact inflation and the movement of the market. Brushing up on tech knowledge, information on start-ups, and the digital revolution can be beneficial, even if investments are in traditional markets.
Investors, venture capitalists, and other entrepreneurs are also scrutinizing the fields of biotechnology, mobile payment systems, online market systems, and digital logistics. Players that can make potential revenue-generating products and services while making a mark on the digital arena will be sought after.
Peer-to-peer lending or P2P will gain more traction. Investors, entrepreneurs, start-ups, and companies needing a huge cash flow will deal directly with one another. This crowdlending platform, which brokers the deal in exchange for service fees, disrupt the traditional bank loan model.
Expect financial literacy to rise. The money-making Millennial generation will not just want to know where to invest or how to get good returns. They will also want to immerse themselves in more personalized aspects of the business environment such as life-coaching and applied psychology. They will want to read people, interpret behavior, and align their discoveries with the movement of stocks and the market.
Climate change can affect economic development. For example, farmers and agriculturists must be able to arm themselves against the next sudden super storm or an unexpected drought brought by La Nina. If not, their produce will be affected, setting off a chain reaction that can affect related industries such as the food industries, transport, and retail. The need to watch the skies and take note of any turbulence holds true for any industry, not just agriculture. Climate change affects everybody and every industry.
The saying that nothing is permanent except change seems to hold more true in the Year of the Monkey. Learn to accept the unexpected, stand firm even though things are shaking; and to come to wiser, more informed decisions, keep checking those apps.