Investment trends suggest a mix of ‘crest of the wave’ sectors and long-term success stories should be incorporated into your investment portfolio
No experts profess to being able to 100% predict the best investments. That said, there are certain sectors that the many of them agree could be wise areas for SME owners to invest their profits in.
Australians are fully committed to exercise and it’s a definite growth market. Manufacturers of ‘activewear’ such as mesh tops and bespoke workout-leggings, footwear and other fitness apparel are doing huge business.
Fitness has also gone high tech with tracking devices such as Fitbits and other apps proving hugely popular – some 20 million Fitbits units have been sold so far alone. Large fitness-related companies, especially those owning other related brands, are worth a look as investment opportunities.
IVF (In Vitro Fertilisation)
A rise in the number of Australian couples deciding to delay having children until later in life means an increased demand for IVF. Companies such as Monash IVF and Virtus Health dominate this area, sharing some 70% of the market between them. This area seems a sound investment option as the trend to have children later looks set to continue as a lifestyle choice.
The Australian dollar has fallen significantly over the past year – good news for organisations involved in the domestic tourism and leisure market. A weaker dollar means more Australians holiday at home, and are joined by larger numbers of overseas visitors. Large companies operating in the tourism and leisure industry are definitely worth a look investment-wise, along with others this CFD trading company recommends.
A recent survey of about 10,000 Australian investors found that most expected the share market to experience less than 5% growth in 2016. As a result, around one in ten would be likely to invest abroad in vehicles such as global equities in a bid to enjoy better growth on their investments. The falling Australian dollar and low interest rates are the two key factors influencing these investors.
The service sector
The service sector had an excellent 2015, achieving 53% of GDP – its largest contribution to the Australian economy since 1981. With the sector expected to continue its strong performance, plenty of capacity for investment in it, and the weakening dollar helping to keep it buoyant, investment in larger service companies might be an attractive proposition.
Renewable energy and the environment
This sector is definitely not a passing fad, governments around the world are committed to developing renewable energy sources and safeguarding the environment. There have been big moves in developing alternatives to fossil fuels for cars with electric and hybrid power, and the number of wind farms and solar facilities are growing. Companies in these renewable energy sectors could be attractive investment options for the long term.
While Australia is a massive country, increased urbanisation is putting a premium on quality farmland. Consequently, this land rises in value and will continue to do so, making for a sound investment option. Investing in a soft commodities fund, or directly with companies involved in the sector, is a gateway into this area.
As illustrated, some investments may ride the crest of wave, as in the current popularity of fitness, while others, such as the renewable energy sector, look like they’ll stay as ‘safe bets’ for longer.