What an extraordinary decade global markets have enjoyed, since coming out of the global financial crisis in 2009. Global markets have been driven by the US market, with the S&P 500 up 256% in USD while the MSCI emerging markets index was only up 49% in USD. We started the Perpetual Global Share fund on the 1st of January 2011, with a view that global markets were going to considerably outperform Australian equities and provide a plethora of outstanding opportunities for our clients.
Over the past nine years, since the inception of this fund, this has proven to be the case. A wise portfolio manager at Perpetual once told me that you can’t tell whether a manager is talented until you see them perform over a decade. We finally will be hitting a decade in 2020 with a healthy double-digit annualised return in our stride.
So what does the next 10 years have in store for markets? I have decided to include 10 predictions for the next decade below, and we will be observing the evolving world with interest.
#1: Transport will continue to evolve but humans will still be driving cars in ten years’ time. Autonomous and electric vehicles will make great advancements. While humans will choose to drive due to the pleasure of it, two car households will probably move to one car households.
#2: Financial services will continue to evolve. Digital currencies will be prevalent, and cryptocurrencies will grow to be an acceptable form of payment. The number of cryptocurrencies however will reduce and consolidate.
#3: Energy usage and its consumption will evolve the way it has evolved over the past century. Renewables will grow as a source of energy, but this growth will differ by geography and depend on what is commercial for each region and what is physically achievable.
#4: Ecommerce will grow towards a quarter of total retail sales.
#5: Light packages will start to be delivered by drones.
#6: Immunotherapy researchers will learn how to improve our immune system to fight certain types of cancer.
#7: People will once more embrace valuing businesses rather than buying concepts and assuming that will translate into profits. Active investing will start to outperform once equity markets correct. The great central bank experiment of lowering interest rates to zero will end and become a subject in universities about how not to manage monetary policy.
#8: We will start buying robotic dogs that can open our doors to accept parcels, keep the house tidy and read the weather to decide whether to take the clothes off the line or not. Artificial intelligence will start to be applied more broadly.
#9: The longest living humans will continue to live in regional areas, living a simple life. Out of the oldest living people that have been verified in the world, 3 are from Japan, 4 from Europe and only 2 from the US. It is clear that longevity and health are not correlated to wealth. It is not correlated to eating fads. It is correlated to eating a little bit of natural, unprocessed foods and living in a lower stress, unpolluted environment. (VIEW LINK)
#10: Health and the environment will continue to grow as a focus for mankind. People will realise that they don’t need to chemically produce fake meat to be healthy, they can just eat more vegetables like we have done for centuries. Falafel will continue to be a loved alternative.
What are your predictions for the next decade?
Is there a theme that you think will have a particularly pertinent impact on markets over the next 10 years? Leave your thoughts in the comments area below.
I have two predictions for the coming decade: Australia will commit to nuclear power production and have projects well underway. And Australia's agricultural industry will become significantly more sophisticated and corporate, and will be thriving as a food producer for the rest of the world - Asia in particular.
Hi Garry, point #9 is a topic I'm fairly interested in. I read last year that a study shows that poor record keeping and downright fraud are common among supercentenarians. So maybe the reason they're all living in remote areas is because record keeping was poor in rural regions in the early part of the 20th century? https://www.livescience.com/oldest-people-may-not-be-so-o...
maybe in overseas countries, but no way will my family nor any that I know of , be moving to one car.
crytocurrencies will die into the historical scrapbook where they belong or be used by a tiny minority of people who are tin-foil hat wearing sceptics. A.I. technology will take much much longer than 10 years before we are buying useful "robotic dogs". ditto for drones delivering goods to our homes.
Peter Nicholas, the Australian public will never agree to allow nuclear power and besides with our abundant sunshine ( solar ) and coastlines ( wind ) we really shouldn't need it. Uranium is a non-renewable resource. If someone could find an affordable way to make clean nuclear fusion( using water ) rather than dirty dangerous fission ( using uranium ) , it would be totally different, but that is probably 100+ years away if ever.