Key megatrends impacting investment markets

Recent developments – including the rise of populism, developments in the South China Sea and around commodity prices along with relentless technological innovation – have relevance for longer term trends likely to affect investors. Being aware of such megatrends is critical given the short-term noise that surrounds markets. Key megatrends relevant for investors are slower growth in household debt; the backlash against economic rationalism & rise of populism; geopolitical tensions; aging and slowing populations; low commodity prices; technological innovation & automation; the Asian ascendancy & China’s growing middle class; rising environmental awareness; and the energy revolution. Most of these are constraining growth and hence investor returns. However, technological innovation remains positive for profits and some of these point to inflation bottoming. This note updates our analysis on longer term themes that will likely impact investment markets over the medium term. (VIEW LINK)