With many traditional saving and investment products offering smaller returns, there is a growing appetite among investors to sink their money into the ‘next big thing’.
How many of us wish we could go back to the 80s and put money into Apple or Microsoft stocks? Perhaps some of us dream of buying Bitcoin back in the 2010s.
Every investor hopes to make shrewd investments that pay off, but for every VHS there is a Betamax and for every Apple there is a Blackberry.
Back the wrong horse and your hard-earned money invested in stocks and shares can easily be diminished or lost entirely.
What will the future hold?
Unfortunately, we do not have a crystal ball and it can be extremely hard to guess how the markets will react from day to day, let alone months or years ahead.
The uncertainty of recent events has seen share and stock prices fall in entirely unexpected ways.
So how can investors look to the future? As with most investment plans, there is no harm in diversifying your portfolio, as long as you have a risk profile that meets your plans and ambitions for the future.
It would be very risky to invest everything you have into the company behind the next promised revolutionary product or service but investing in a managed fund focusing on a particular sector or category of business could be much safer.
What should investors be looking out for?
The next decade is likely to see a big focus on green technologies and gadgets that change the way we interact with the world.
We have seen a recent boom in the sale of electric cars and so investment in new automotive tech might seem sensible.
Cars and most consumer technologies rely on the computer chips that power them. At the moment, there is a worldwide chip shortage, which is delaying the delivery of new vehicles and many other consumer electronics, pushing up the price of these goods and the value of the companies behind them.
Although the cost savings of electric cars are a real driver of their growth, another reason behind many purchasers’ decision to purchase zero-emission vehicles is the environment.
With Governments around the world introducing new incentives, levies, taxes and fines connected to their net-zero goals, we are likely to see a sharp increase in the purchase of renewable technologies, including solar, wind and hydropower.
Equally, how we manage energy usage is becoming more important and so companies developing new ways to heat and power homes and businesses could be among those to see strong growth, alongside businesses that are helping to reduce pollution and waste.
Finally, we have the other key frontiers – automation, AI, robotics and virtual reality. These four interconnected technologies have huge potential to change the world, including our perceptions of reality.
As the processing power of computers continues to increase, the availability of these innovations will increase and they are likely to become ubiquitous in our daily lives, in a similar way that smartphones have become an everyday essential for many of us.
Of course, these things are notoriously difficult to predict and so diversification remains the name of the game. That is also why it is crucial to seek independent financial advice before deciding to plunge your savings into risky investment strategies.
For personal wealth management advice, please get in touch with our private client team.