2020 marks not just a New Year but a new decade. A century ago, the roaring 20s were an exciting time of fast-moving technology and dramatic social changes, where fortunes could be made and lost.
Will the 2020s roar, what will the factors behind it be – and what will they mean for your personal finances?
It looks as though the environment may be a major factor. Climate change is becoming harder to ignore, with fires threatening to make parts of Australia uninhabitable and worries about melting polar ice hitting the headlines on a regular basis.
But there are positive signs too. Technological developments are exciting, and they could include solutions for at least some of the climate change issues.
At Continuum we look at some current developments and see where they might lead.
The end of the fossil fuel engine
Petrol and later diesel road vehicles have shaped the modern world, making the modern city possible and personal mobility simple. But after more than a century the age of the Internal Combustion Engine (ICE) is over, and electric cars are the future. The transition has just begun, but the move from ICE vehicles to Electric may happen sooner and more quickly than most of us realise.
New battery technology with increased range and capacity and reduced costs will make electrics possible for everything from cycles to heavy good vehicles. Legislation from governments that are starting to see the real costs of pollution may make them inevitable.
But it’s not just the road where fossil fuels may become obsolete. Aircraft are major polluters. The technology for electric aircraft is in its infancy, but it may be maturing faster than is commonly realised.
New energy sources
The switch to electric transport will mean even greater demand for electricity, and it is not the only growing consumer. It is not generally known that the internet, or rather the data centres that feed it is a major energy user. Data centres may become the top energy consumers by the end of the decade, producing five times the CO2 emissions of all current global air travel.
Growing populations in developing countries will also demand electricity as a basic right.
The growing demand cannot be met by conventional sources, especially if coal fired power stations are being scrapped. It means that the demand for renewable energy will increase. Solar, wind and wave power could all become important to achieve sustainability.
Homes may be greener
Still thinking about energy, overall UK emissions are falling, but those from housing are on the rise. If the government is to reach its emissions reduction targets most of the homes across the UK will need to be replaced or radically refurbished.
Solar panels, air-source and ground source heat pump and mechanical ventilation systems are all needed – representing a major investment, but potentially major sources of profits for builders and fitting companies. New builds may start to be constructed in factories and assembled on site, increasing quality and driving down costs – although in the UK at least there will probably be little chance of house prices falling as a result.
What does this mean for you?
Some of the old certainties may be swept away by the changing tide of technology and environmental concerns in the next ten years. The transport industry is looking at new solutions, and petrochemical companies may be changing their focus. There may be new opportunities with green energy, and with many sectors that are ready to embrace artificial intelligence.
These changes could affect your investment portfolio. There may be little point in investing in sectors which are set to shrink, while ignoring those newcomers who offer the greatest scope for growth.
However, at Continuum, we believe that it is impossible to predict the future and what it will hold, but it is possible to prepare for it. With a diversified approach, the risks can be reduced, and by keeping a careful eye on developments, it may be possible to find and profit from new opportunities. Whatever investments you hold both now and in the future will fluctuate in value and returns are not guaranteed, and your capital is at risk, we believe by seeking independent financial advice regarding your own investment strategy you should be in the best position to maximise your investment opportunities.
Our approach has always been to support our clients for the long term. We believe that is one thing that will not change – so to start making the most of the potential of the new decade simply call us now.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.
References:
https://www.nytimes.com/interactive/2019/12/26/opinion/2020s-future-predictions.html
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