Making the most of unstoppable megatrends

All information is correct as at 31 December 2021 unless otherwise stated.

Trends are everywhere. They influence what we buy, what we wear and even how we think. They tend to come and go, but they’re normally all around us.

Trends matter to investors too. They can impact what investors buy and sell, and what they think of certain companies, sectors, and a stock market as a whole. That can be a good and bad thing.

Some investing trends led by speculation and sentiment will naturally fizzle out, and with that can come disappointing returns. However, megatrends, underpinned by strong fundamental shifts can work well for investors. The trick is, as always, not to put too much into one thing.

Being well-diversified will help deal with the trends that don’t catch on and turn out to just be fads. We take a closer look at how to tread the line between fact and fad.

Megatrends have always been part of investing and bring lots of opportunity. They’re certainly not a reason to avoid investing and keep all your money under the mattress, especially not with inflation reaching its highest point in over a decade. Investors should be doing their best to spot them and make sure they’re set up to ride the wave.

Investing for your future

There’s usually a moment in life where we twig we can make more of our money. A spark of realisation.

We have to switch our money ON if we want a better chance of growing it over the long term and your best chance of that is to invest. Our readers of the Investment Times have most likely had their inspirational lightbulb.

As a reminder, over 100 years of data shows the stock market has beaten cash in 91% of all ten-year periods. Though there’s no guarantee this will continue, as unlike cash, investments rise and fall in value, so you could get back less than you put in.

Investing’s a commitment to improving your future – the aim of getting rich slowly. Doing it the right way. Taking the right amount of risk. Making the most of tax shelters. And not putting all your money into one or two single investments.

The impact of megatrends

In your autumn issue of the Investment Times, we looked back at how investing has evolved and how investors could prosper in a post-pandemic world. In this issue, we’re focusing on megatrends too big to ignore.

These include the rise of Asia, the evolution of commerce and four share ideas that could benefit from an ageing population. We’ve also looked at wider-reaching themes like sustainability and how resource scarcity is impacting our finances.

We hope you find the investment ideas and insights in this issue useful in helping you make the most of these unstoppable megatrends.

Remember though, everyone’s goals and circumstances are different. Investing isn’t a one-size-fits-all approach. Past performance also isn’t a guide to the future.

Annual performance across the major sectors (January to December, %)

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  2011-12		2012-13		2013-14		2014-15		2015-16
  Europe (ex UK)	18.97%	North America	31.33%	North America	17.80%	Japan	15.83%	Global Government Bonds	33.07%
  Asia Pacific (ex Japan)	16.68%	UK All Companies	26.17%	UK Government Bonds	14.55%	Europe (ex UK)	9.21%	North America	31.67%
  Global High Yield Bonds	16.05%	Japan	26.14%	UK Corporate Bonds	9.95%	North America	4.74%	Asia Pacific (ex Japan)	26.59%
  UK All Companies	15.06%	Europe (ex UK)	25.95%	Asia Pacific (ex Japan)	9.52%	UK All Companies	4.54%	Global	24.03%
  Global Emerging Markets	13.09%	Global	21.78%	Global Corporate Bonds	7.88%	Global	4.02%	Japan	23.58%
  UK Corporate Bonds	12.31%	Global High Yield Bonds	6.27%	Global	7.43%	Global Corporate Bonds	0.55%	Japan	16.85%
  Global	9.83%	Asia Pacific (ex Japan)	2.15%	Global Goverment Bonds	5.72%	Global Goverment Bonds	0.22%	Global High Yield Bonds	14.48%
  North America	7.50%	UK Corporate Bonds	0.22%	Global Emerging Markets	2.87%	UK Government Bonds	-0.40%	Global Government Bonds	14.10%
  Japan	3.36%	Global Government Bonds	-1.27%	Global High Yield Bonds	1.37%	UK Government Bonds	-0.51%	Global Government Bonds	13.50%
  Global Government Bonds	3.09%	Global Emerging Markets	-4.19%	Japan	0.58%	Asia Pacific (ex Japan)	-3.00%	UK Government Bonds	11.21%
  UK Government Bonds	1.50%	Global Government Bonds	-4.51%	UK All Companies	0.48%	Global High Yield Bonds	-3.42%	UK All Companies	11.19%
  Global Corporate Bonds	N/A*	UK Government Bonds	-5.27%	Europe	-0.88%	Global Emerging Markets	-9.76%	UK Corporate Bonds	8.94%

Past performance isn’t a guide to the future. Source: Lipper IM from 31/12/11 to 31/12/21, IA sector performance.

*Full year performance data not available.

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  2016-17		2017-18		2018-19		2019-20		2020-21
  Asia Pacific (ex Japan)	24.64%	Global Government Bonds	2.18%	North America	24.38%	Asia Pacific (ex Japan)	19.43%	North America	26.08%
  Global Emerging Markets	24.52%	UK Government Bonds	-0.08%	UK All Companies	22.42%	North America	16.37%	Global	18.28%
  Japan	17.86%	North America	-1.60%	Global	22.31%	Global	15.11%	UK All Companies	17.13%
  Europe	17.36%	Global Corporate Bonds	-2.04%	Europe	20.14%	Global Emerging Markets	13.91%	Europe	15.65%
  Global	14.17%	UK Corporate Bonds	-2.16%	Global Emerging Markets	17.03%	Japan	12.07%	Japan	2.77%
  UK All Companies	14.03%	Global High Yield Bonds	-3.29%	Japan	16.49%	Europe	10.74%	Global High Yield Bonds	2.03%
  North America	10.11%	Global	-5.78%	Asia Pacific (ex Japan)	15.68%	UK Government Bonds	8.96%	Asia Pacific (ex Japan)	1.92%
  UK Corporate Bonds	5.00%	Asia Pacific (ex Japan)	-8.95%	Global High Yield Bonds	11.81%	UK Corporate Bonds	7.75%	Global Emerging Markets	1.27%
  Global High Yield Bonds	4.92%	Global Emerging Markets	-11.01%	UK Corporate Bonds	9.51%	Global Corporate Bonds	6.19%	Global Corporate Bonds	-0.52%
  Global Corporate Bonds	3.36%	UK All Companies	-11.12%	Global Corporate Bonds	8.65%	Global Government Bonds	5.18%	UK corporate Bonds	-1.90%
  UK Government Bonds	1.69%	Japan	-11.46%	UK Government Bonds	6.87%	Global High Yield Bonds	3.96%	Global Government Bonds	-4.56%
  Global Government Bonds	-0.52%	Europe	-12.36%	Global Government Bonds	4.01%	UK All Companies	-6.26%	UK Government Bonds	-5.19%

Past performance isn’t a guide to the future. Source: Lipper IM from 31/12/11 to 31/12/21, IA sector performance.

*Full year performance data not available.