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An Opinion Of The Investment Future

August 26, 2020

We read and listen to many companies and how they view the future investment landscape. One such company, Capital Group, is the parent company of American Funds. A few additional comments are from Jill.

Recently, they shared a view of investing for the next 10 years.

  • The big are getting bigger
    • Online advertising in 2007 on Alphabet (Google) and Facebook was 7%. Today it is 37% of the advertising dollars. This trend will likely continue.
  • Demand for cloud-based services will continue to grow
    • CEO of Microsoft, Satya Nadella, said they’ve experienced two years of growth in two months. With more of us working remotely, more data needs to reside on the Cloud. This increase in demand should continue.
  • Innovation may come from the emerging markets
    • Chris Thomsen, principal investment officer of EuroPacific Growth Fund said, “We’re likely going to see emerging market companies move from copycats to true innovators.”
  • Cure for cancer
    • With the advancements in gene therapy and applications of artificial intelligence, there is an acceleration in drug development. Add what is being learned by so many people working on a COVID-19 vaccine that may apply to other diseases, it is possible some cancers may be cured.
  • House calls
    • As a result of COVID-19, meeting with your health care provider is remote. The trend will likely continue and become more complete when you add development of at-home diagnostics and prescription delivery.
  • Streaming services
    • Consumers shifted to streaming content with the pandemic. Currently one-third of content is done through streaming. They are projecting by 2030, 80% of content will be viewed via streaming platforms. Good news for Netflix, Amazon Prime Video, Disney+ and Apple TV. The loser, traditional TV service.
  • Artificial Intelligence (AI) – the next tech revolution?
    • There are many algorithms in place for machine learning (how computers become “smarter”). It’s used on Facebook, Netflix and Amazon already. This trend will only increase and its application expanded to other industries.
  • Self-driving cars
    • AI is part of this trend. As it progresses, so will self-driving car improvements. The impact on the roads is huge. It will impact land use, energy consumption, real estate, insurance rates, etc.
  • ESG (Environmental, Social and Governance) impact on investing
    • Companies and investors are focusing more and more on ESG screening. In a previous newsletter, we identified the increased attention the public is paying to these issues. This trend will only expand. It is the fastest growing area for new mutual funds and exchange traded funds.
  • US-China
    • The impact of this rivalry will be felt by businesses in both countries. How it looks going forward will depend upon the outcome of the election.  

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