Important investment trends in 2022
In 2022, your investments will be increasingly influenced by events in politics and economics. A new trade war, mounting debt in developing economies, or a further weakening of the Euro could all have a negative effect on overall markets and your portfolio. But the markets may be part of the solution as well, especially with regard to climate change.
In our strategic long-term forecast Financial Markets 2022, we present a future scenario based on plausible political and economic developments in the Western world. The scenario is designed to help you in preparing for what’s to come over the next five years. We investigate which risks could be particularly disruptive to financial markets, as well as opportunities and strategies for investors seeking protection from or exposure to these risks. The scenario also looks into changes in the financial regulatory environment, which could also have a significant effect on financial markets.
The scenarios are developed based on five years of research. 2016 gave us a glimpse of what’s to come in 2017 and 2018, but in our long-term strategic forecast, we make no predictions on events beyond 2022. That’s because we want to show that the future is not set in stone and that it is possible to plan for the future without being tied down by events that are still taking place today. Interested in cryptocurrency? You can invest your money with Bitcoin Code!
Green and Reusable
The scenario includes a transition to a low-carbon economy that focuses on renewables, green technologies, and innovation. At the same time, there will be growing pressure to reuse products and materials as a way of reducing waste. This shift towards sustainability is likely to be rapid, causing traditional industries such as coal, steel, and oil to shrink rapidly. The Internet of Things will play an important role as the world’s infrastructure is transformed, and new business models like sharing, renting, and peer-to-peer become more common in the same way that the internet changed the world almost overnight. It will be a change that’s fed by a growing awareness of the downsides of our current model of production and consumption.
This combination of green, sustainable growth, and new technology will change the competitive structure of many industries. Over the next decade, we will see a growing number of new companies that challenge existing industry leaders, many of which are already fighting tooth and nail to survive. Market shares will shift, allowing disruptive upstarts to challenge incumbent companies in their core businesses. The success of these “new contenders” also depends on factors such as their ability to attract and retain talent with an entrepreneurial mindset. This means that a number of industries and companies may have to adapt quickly to new ways of working, competition, and innovation.
The digital finance industry will continue to grow and become increasingly important for businesses and individuals looking for new types of investments. This growth is driven by innovations like cryptocurrencies, which offer investors real-time investment opportunities. These digital currencies, which are encrypted and decentralized, can be exchanged with other currencies, facilitating international transactions in a borderless manner. Cryptocurrencies are not backed by any government or central bank, but they are increasingly used to carry out transactions across borders, including digital payments. Over time, many of today’s cryptocurrencies will evolve into smart contracts, meaning that their value is determined by the consensus of all parties on the network.
The Electric Vehicle Industry
The auto industry is already undergoing a fundamental shift. It is becoming more software-dependent and is starting to transition from internal combustion engines to e-cars. China, for example, has already made it a government policy to develop the most advanced electric vehicle platforms. Electrification of the transportation system and the development of new battery technologies are key technological trends that represent significant opportunities for investments in this sector.
The growth in the transportation sector will be fueled by the rise of new forms of mobility, such as electric vehicles and autonomous driving systems. This growth is likely to be slow as there are still many issues to be resolved in terms of charging infrastructure and consumer acceptance, but it is also accelerating as governments like China, Norway, and the Netherlands are taking preferential positions in the transport sector. The EU states are also realizing that they need to invest in new transport systems to meet the needs of their citizens. With new technologies and investments, more efficient modes of transportation will become a reality, and smaller emissions by the vehicle industry will be one of the key factors behind this process.
The future will be shaped by a multitude of factors, but having a better understanding of those trends will help you develop investment strategies and control your portfolio exposure. We’ve taken a look at global trends that could potentially be disruptive to your financial market performance depending on their scale and speed, as well as the opportunities these developments may provide. But the bottom line is that you need to be agile in order to make the most of these opportunities. Moving forward with a strategic long-term investment plan should help you achieve this goal.