Check out what’s happening in the world this week, plus what it means for you and your investments. (3:22 min read)
This information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.
1. The world’s future energy outlook
Bloomberg recently released its New Energy Outlook focused on how the world’s energy market will evolve in the next 30 years.
Among the raft of forecasts was the projection:
“Cheap renewable energy and batteries fundamentally reshape the electricity system. Batteries boom means that half of the world’s electricity by 2050 will be generated from wind and solar.”
What does it mean if you’re invested in the stock market?
The report suggests renewable energy will be big winners across much of the world.
If they are correct, Australia is set to generate over 90% of its energy via renewable sources by 2050 – up from 17% in 2016.
We believe Bloomberg’s estimates are sound.
If you’re invested in coal mining companies or fossil fuel power stations, proceed with caution; demand could decline quite significantly and perhaps rapidly over the next decades.
What does it mean if you’re invested with AtlasTrend?
AtlasTrend recently launched the Clean Disruption Fund.
This fund invests in the disruptive generation and use of cleaner energy technologies around the world.
We believe the New Energy Outlook is a shining example of the impact this multi-decade megatrend is set to have on creating a more sustainable world. From an investment perspective, we think companies driving this trend are set for a strong decade ahead.
2. Sydney’s falling property prices
Figures from leading property data company Corelogic showed Sydney house prices fell 4.5% for the 12 months to June 2018.
The latest price drop is the largest seen since March 2009, around the time of the global financial crisis.
What does this mean if you’re considering investing in residential property?
Australia, particularly the major eastern cities, have enjoyed very strong multi-year house price growth.
Compared to many key international benchmarks, house prices appear to be overvalued in some parts of Australia on average, so a fall in price isn’t unexpected.
However, it is a salient reminder property prices, like any other investment asset, can go up or down in price over a period of time.
Beware of the property spruikers offering fixed or “guaranteed” returns for investing in property; the certainty of their claims is highly questionable.
What does this mean if you’re invested with AtlasTrend?
AtlasTrend’s managed funds do not invest in Australian residential property. Some of our managed funds do invest in companies with property at their core.
However, these investments are typically linked to an underlying megatrend where we believe demand for these specific types of property will rise over time.
For example, the Big Data Big Fund invests in companies that own the properties where data centres are located, since they are central to the growing demand for cloud services.
3. Amazon: the virtual pharmacy
Amazon has purchased online pharmacy start-up PillPack for around US$1 billion in cash.
Once the purchase is complete, it means Amazon will be in the business of selling prescription drugs online.
It’s yet another example of the e-commerce giant diving into a new industry, and this time they’ve got their wallets set on healthcare.
What does this mean if you’re invested in Amazon?
In the grand scheme of Amazon’s entire business, the acquisition of PillPack is not that material from a size perspective.
What it does show is Amazon sticking to its mission of being “Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online”.
PillPack delivers medication to a customer’s door that is sorted into the required dosage for each day. They also connect directly with a customer’s doctor to automatically handle refills.
No more waiting in line at the pharmacist for your script to be filled.
What does this mean if you’re invested with AtlasTrend?
Some of AtlasTrend’s managed funds are invested in Amazon.
In particular, it is a key investment for the Online Shopping Spree Fund. Amazon buying PillPack validates our strong belief there are many goods and services that can transition to being sold online.
If something as personal as prescription medicine can be purchased online with an improved customer experience, it shows no traditional good or service is safe from online disruption.
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