When you invest, what are the most important things to you?
Is it only financial returns or should you also consider whether your money is invested in something that contributes positively to the world?
As investment managers that have invested across the globe, we care equally about both and we think you should too. Here’s why.
The following 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.
Positive investing can be good for you and the world
From experience, many long term investments that have delivered strong financial returns over the past 5 to 10 years have one thing in common. They are all contributing to something positive happening in society. Here is one example you’ll be familiar with.
Remember the launch of the first Apple iPhone in June 2007 nearly 10 years ago?
That event kick-started the huge growth in the smartphone era. Your friends and family living abroad could suddenly share more of their lives with you with the press of a button. The quality of life for millions around the world has been significantly improved (and in many instances lives have even been saved) in medical and emergency situations from the use of smartphone apps. No wonder smartphones have grown at such an astonishing rate from approximately 120 million sold in 2007 to 1.5 billion sold in 2016.
From a financial return perspective, Apple’s share price has returned on average an excellent 22% per annum (to 31 December 2016 in US$) since the launch of the first iPhone nine and a half years ago. It wasn’t just Apple that benefitted. Many companies in the entire smartphone eco-system also did well.
Yes, you can make a strong financial return while also feeling pleased about investing in companies which provide goods or services delivering meaningful positive change for millions or even billions of people globally.
What other trends or themes are set to deliver lasting positive impact to the world on a similar scale and potentially provide strong financial returns? Here are some of our top picks.
1. Exponentially growing powers of big data
The powers of big data will materially change the way we live for the better and is set to impact nearly every person on earth. From saving lives through better medical diagnosis and treatments to providing much improved online shopping experiences, the powers of big data will become part of our everyday lives, even if you might not always notice it.
This isn’t science fiction, it has already started to happen. The following is a short video of the terrific impact of IBM’s big data cognitive computer (called Watson).
This increasing ability of big data analytics to find useful patterns and trends from the exponential growth of digital data may well provide greater positive benefits to society in the next 10 years than the positive effects of smartphones we have all experienced in the past 10 years.
2. Alternative energy starts becoming mainstream
Imagine a world where energy mostly comes from non-polluting renewable sources?
The cynics will say this won’t happen for a very long time. However, the facts show it could easily start happening within the space of the next decade. Renewable energy sources such as solar have declined in price so rapidly that in some countries it is now comparably priced versus fossil fuel energy. If the rate of price decline continues, within the next 5 years, many households will generate their electricity from their own rooftop solar panels without drawing on power from traditional electricity grids.
The era of renewable generation becoming mainstream is closer than most people believe. When it arrives, it will have tremendous positive environmental and practical benefits for individuals and society. The following is a video of what is already possible with solar power and the benefits it is delivering for an entire community of people.
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