After watching a Nate'O Brien youtube video where he talked about his 2021 investing directions and that he will be adopting more of a trend investing. So what exactly is trend investing? Trend investing is the process of putting your money in stocks, industries or markets expected to boom consistently in the future. You would then follow the trend up until it’s the right time to sell off and exit the market with major profits, sounds easy? Hard to implement but if it is a future trend, it should be moving upwards in the long term. So, how do we identify trends?
Trend Investing
Trend investing would be to capitalise on the long term trends so for one, we know that tech stocks would definitely be very much relevant although it also depends on how they adapt themselves to the environment. So in the long term, we might also see more cloud based or data driven companies being more prominent as companies seek to store their data in cloud and also to have data points for interpretation.
Climate change is also something that in the future, a lot of emphasis will be placed on it. So companies like Tesla where electric vehicles, solar energy and batteries are the main driving forces and also semiconductors like Nivida as chips are needed to power on more WFH arrangements and faster 5G networks.
Looking out for emerging patterns
From a CNBC article, you should focus on trends not fabs. For example, jobs like data administrators or telephone operators will be easily automated in the future as robots and AI will be designed to allow work to be done with lesser to no errors and at a faster rate. With my job being also largely administrative, I do also feel the threat of being automated. So if things are being automated means that technology will play a huge part in future trends.
Beside focusing on trends, the article also mentioned to look for emerging patterns for example, more people are reading news online and physical newspaper is no longer as readily available. In this case, we know that people wants news fast in the case where it is concise and impactful hence companies that are able to pivot to the new normal will survive if not, they will disappear.
Semiconductors and Tech
Semiconductors have been something that my friend brings up very often. He finds huge value in semiconductor companies as there is a rise in people working from home and more people are using the internet as entertainment in their spare time due to the pandemic hence chips are in shortage currently. Many digital consumer products in everyday life such as mobile phones / smartphones, digital cameras, televisions, washing machines, refrigerators and LED bulbs also use semiconductors. I haven't really explore into the world of semiconductors but understand that there really is a need for it currently.
Another area that will be staying will definitely be technology companies. As the world becomes more intertwined through internet, applications and softwares will have to step up to be bridging points and to assist. Although some have mentioned that technology stocks have been overvalued as everyone puts money into it, I still do see it's growth over the next few years.
Following trends can be a good way to ride on the upwards growth however, you do also need to be up to date and follow through on whether the trends are long or short term. The pandemic has brought about a huge shift in trends and certain industries are experiencing exponential growth. Riding on that trend can prove beneficial but research will have to be done. The world looks so different as technology looks to disrupt record labels and also arts as non-fungible tokens (NFTs) allow creators to sell their art on their own through an NFT. Seedly came out with an article with a nice article on NFTs. If you do follow the YouTube space, you will know that NFT really is the next up and coming investments.
What other trends are there now besides technology? Are you interesting in trend investing? Do share your thoughts below!
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References:https://www.notion.so/Trend-Investing-What-it-is-and-why-more-people-are-adopting-this-approach 4e17e653c6794773bfa6c1efbea42ff6#71d22489c6fe4056897a906658d33e69
https://www.robeco.com/docm/docu-5-things-you-should-know-about-trends-investing.pdf
https://www.barrons.com/articles/chip-shortage-spells-trouble-from-cars-to-game-consoles-51612996675
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