Market trends tend to change every decade but there are some companies and industries that perform at the top consistently. Learning how to spot these trends from an equity investment standpoint can help you select better long-term channels of investment.
Why is that? What are the micro and macro-economic changes that come together to set trends that nurture the accelerated growth and long-term survival of these industries?
Here are the government reforms, technological changes, and consumer-perspective shifts that will decide which businesses will remain top dogs in the long run.
#1. Digitalization
The COVID-19 outbreak of March 2020 set off a tide of new government and business policies that reached every corner of the world. Major cities went into lockdown, some of which remain under lockdown today to contain the outbreaks of new variants.
Businesses have had to adapt by digitizing their processes, such as remote-working and online communication to keep their services active. The pandemic exposed a divide between businesses that had previously digitalized and the ones that hadn’t. Not only has digitalization and investment in AI helped lower costs for many businesses, it’s become the pillar for survival in today’s economy.
Trend – Companies with more automated processes are going to be the industry leaders of the future.
#2. Sustainability
The world is currently facing major collective struggles, particularly climate change. In 2016, the World Economic Forum announced its 2030 Agenda for Sustainable Development by transforming business practices all over the map. It includes 17 development goals that have been carefully designed based on the clarion calls from ordinary citizens across the globe, and major economists and scientists. According to a recent global survey by IPSOS, India ranked third for the level of awareness when it comes to the WEF’s sustainable development goals.
Trend – Companies with a good record of social consciousness, transparency, and sustainability will be preferred by consumers and investors.
#3. Rise In Domestic Manufacturing
The Indian government has released a lot of initiatives to encourage domestic investment and production of major goods and services. This is accompanied by various policies to discourage competition from foreign brands such as duties and limits. There has also been a cut in corporate taxes to encourage Indian companies to manufacture at home.
Trend – Companies that have domestic manufacturing will see big gains
#4. Data Privacy
The privacy of your personal information has become a growing concern due to the expedient growth of technology in certain sectors. This links to point #1 of Digitalization. Your personal data is a valuable commodity that can be misused with ease. Both the awareness and alarming nature of this situation has been growing in the recent decade.
Trend – Companies that use personalized approaches and provide security features to their customers are likely to have a higher share of the Equity market in the future.
#5. Visual/Experiential Marketing
The days of posters and televised ads are getting cut short. Even Digital Marketing is facing a tough fight from more advanced forms of marketing. Thanks to technologies such as AR/VR/MR marketing has gone beyond platforms and engages with customers on a much deeper experiential level.
Trend – Companies that leverage these marketing trends will likely become game-changers in the future.
Your level of awareness of market trends while they’re still in their early stages can make or break your financial portfolio. So make use of the above trends and decided on your investment strategy.
