Check out what’s happening in the world this week, plus what it means for you and your investments. (3:00 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. Facebook’s record-breaking stock drop

Facebook recently reported worse than expected quarterly results.

The stock price dropped approximately 24% immediately afterwards, leading to a US$150 billion fall in the company’s market value.

What does it mean if you’re invested in Facebook?

There were two key reasons for the drop in Facebook’s share price:

  1. Revenue growth rates will be slowing down as it grows more engaging aspects of the Facebook platform that currently have lower levels of advertising.
  2. The company expects profit margins to trend lower as it invests in products, safety and security.

From an investor’s perspective, we believe Facebook has made the right decision to sacrifice some short-term profit for long-term durability as it invests to further engage and protect users.

What does it mean if you’re invested with AtlasTrend?

One of our managed funds is invested in Facebook. A few weeks prior to Facebook’s earnings announcement, we had sold part of the investment in Facebook at over US$200 per share.

Following the earnings announcement, we have subsequently bought some Facebook shares at approximately US$175 per share.

We continue to believe Facebook is a strong long-term business.

 

2. Suing your super fund 101

23-year-old Mark McVeigh is suing one of the country’s largest superannuation funds for not providing details on how it will minimise climate change risks.

The case will be the first of its kind and has the potential to transform how and where money is invested.

What does this mean if you’re invested in the stock market?

We believe climate change is a real risk not only for the planet, but for stock market investments, too.

Greenhouse gases and increasing pollution is already having material negative impact around the world. For example, air pollution is already the fourth largest killer of people globally.

Investing in traditional companies and industries that continue to cause more pollution or greenhouse gases is a material risk because we believe governments and consumers around the world are increasingly looking to use more sustainable products and services.

What might have been a safe investment in industries such as coal mining or fossil fuel power generation, could quickly turn into unloved investments as climate change risk gathers pace.

What does this mean if you’re invested with AtlasTrend?

Recognising that the climate change risk is real but also represents a generational investment opportunity, we recently launched the Clean Disruption Fund.

This fund specifically invests in companies helping create a greener and more sustainable world. For example, those leading the electric vehicle and clean energy revolution.

 

3. Labor’s AI pledge

The Labor party has said it wants to spend $3 million to create a new artificial intelligence not-for-profit research centre if it wins the next election.

The centre would promote research and industry acceleration of artificial intelligence.

What does this mean if you’re invested in the stock market?

We believe $3 million is a drop in the ocean, and is unlikely to have any material impact on advancing artificial intelligence research in Australia.

The simple fact is, companies around the world are already spending hundreds of millions if not billions of dollars each on artificial intelligence research.

For example, Google has reportedly spent US$3.9 billion buying companies to advance its artificial intelligence capabilities and research.

Investors who pick the companies at the forefront of the AI race should be set for a strong decade ahead, given the usefulness of the technology across nearly all industries.

What does this mean if you’re invested with AtlasTrend?

AtlasTrend’s Big Data Big Fund is directly exposed to the AI race, since big data and artificial intelligence go hand-in-hand.

A number of the companies the fund invests in (including Alphabet, the parent company of Google) are at the cutting edge of developing AI applications for use across the world.

 

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About Kent Kwan

Kent Kwan is a Co-Founder of AtlasTrend, an online investment platform that makes it easy for anyone to learn and invest in trends transforming our world. Kent has over 15 years experience in financial markets including as Chief Investment Officer at Arowana International Limited, and roles at JP Morgan and Macquarie.