There are various strategies that an investor uses to create their investment portfolio which depend on their appetite, their risk reaction, and expected returns. There are various themes in investing which are compiled together to form these said strategies to move in a specific direction and gather together a collection of companies involved in certain areas that he or she predicts to generate above-market returns over the long term. This process is known as thematic investing.
The theme for investments in 2021 was the Reopening of the Global Economy whereas the theme for the current year which is 2022 is Still Growing but yet Slowing. Take a look at the top investment themes recommended by experts that can be used by investors in 2022:
- The most popular one here is supply chain normalization which is the most important feature which will drive markets higher in the current year because of the reopening of global markets after the pandemic of covid-19 which began in 2020.
- Solid earnings are expected after the resumption of operations on a global scale; corporate tax policies remain the wildcard that will be used to measure the pace of growth in the coming year.
- Pandemic resulted in the maxing out of prices of goods and services which is simply inflation at a rate that is testing the tolerance of consumers and their ability to absorb that. Investors’ tolerance to handle the pressure of inflation on profit margins and evaluations is also reaching its saturation point.
- Since the popularity of digital and unregulated currencies in the form of cryptocurrencies and non-fungible tokens(NFTs), blockchain technology has become mainstream since 2021. Experts think that it is just the beginning for blockchain uses in the case of the creation of the web 3 world.
- Global monetary policy is also an important theme to look out for investors as there is a delicate balance between forwarding guidance and strategic and winding unprecedented accommodation.
- There has also been peaking growth which is not similar to no growth or negative growth but just a slow environment that will affect the next phase of the business cycle.
- Although the requirement for oil has seen a secular decline, production agreements by OPEC and sluggish rig counts, and still nascent alternative energies suggest that supplies will be tight and prices will elevate.
- Since the onset of the Internet, it has always seemed to revolutionize one sector or the other in a matter of months. The metaverse is one such example that is here to stay and aimed at shifting the augmented and virtual reality world beyond entertainment and could also enter the telecommunications, work, and travel sectors.
- Findings on traditional infrastructure in the area of broadband access, electrical grid update, and surface transportation for all or part of the bill which has been passed in 2021. This targeted upgrade of infrastructure has the potential to lead to fixed income investment opportunities which will pave the way for spending habits in 2022.
In conclusion, it can be said that his thematic investment philosophy is built on the foundation of five trends that include climate change and resource scarcity, demographic and social change, and economic power shift and rapid urbanization which are all somehow supported by technological breakthroughs which have happened in recent years.