There are many investing strategies that you can choose to follow, however most would agree that it doesn’t matter much if you invest for the long term. One investing theme you could add into your long term strategy is ‘Investing in where the World is going’.
This strategy is likely to turbo charge your investment returns for a few reasons:
- Old companies that often pay huge Dividends and don’t adapt to change, will go extinct (therefore lose you money)
- Newer adaptive companies are literally changing how we live (A.I, Blockchain, Clean energy etc..)
- You will be shaping the future outcome of the planet and making money at the same time!
A perfect example of an old company not adapting and going extinct is Blockbuster. The executives relied heavily on their brand name and loyalty of customers to make money and this created their downfall.
People are generally lazy in nature, they want things instantly and frankly got pretty annoyed by the late fees Blockbuster were charging. In stepped Netflix with a perfect solution to solve all these problems, with on-demand streaming content.
Blockbuster went from the King of content to Bankrupt within 25 years, meanwhile Netflix went from a DVD upstart to the King of content within 20 years with over a 48,000% return since its IPO price of $1.21.
Arguably the most adaptive company within the last decade has been Tesla. Often thought of as just an electric car company it has many more strings to its bow than people think.
The ability for Tesla to create a mission to provide electrified transport to the masses at a time when nobody was interested or cared about the impact on the environment was truly remarkable.
It’s ensuing rise in the stock market and exponential growth in popularity among consumers occurred because the product was elite, had a mesmerising CEO and the product was great for the Environment.
At the same time traditional car makers with combustible engines were caught off guard and are trying (hopelessly) to play catch up with Tesla’s first mover advantage. Because of this Tesla is valued at more than the top 9 Car makers combined and has had over a 17,000% gain since it’s IPO price at $3.84.
Shaping The Future
“Your money is a vote.” With every dollar you spend you are quite literally voting for how you want the world to be. Think about it, if everyone in the world stopped spending their money on cars that used combustible engines and only bought electric cars it would literally change the world.
The same is true with how you invest, if you believe a company that specialises in providing clean and safe water solutions to poverty stricken places has potential then investing in this company will help it become more of a reality.
One of the latest trends globally is obviously Cryptocurrencies, however people aren’t as aware the mining of currencies produces significant amounts of pollution.
If there was a company that could create clean Cryptocurrencies then it would likely thrive amongst conscious investors looking for long term investment options.
Where the World Is Going
- Clean Energy
- Artificial Intelligence
- Drone Technology
- Augmented Reality
- Space Exploration
- Fintech Disruption
- Genome Therapies
These are just a few of the disruptive areas that could help change and shape where the World is going. I have no doubt there will be many companies within these industries that will produce returns like Netflix and Tesla.
The difficult part will be finding those individual companies, this is where the power of ETF’s & Index funds come into play. You can gain exposure to these areas by buying a group of stocks within the theme you are interested in, thus reducing your risk and still enabling exposure to successful companies.