5 key investing trends to watch in 2022

There is no doubt that investing is still one of the best ways to preserve and create wealth in the modern age, but it does come with the proviso that what one chooses to invest in be carefully chosen.

It is therefore not surprising that in 2022, the market continues to be strongly influenced by the evolution of the Covid-19 pandemic and the way policymakers react to the resulting economic challenges, both globally than local. Once again, we should see better performance in technology-related sectors. With the progress made over the past two years, it’s already starting to look more like 2032.

Digital Technology, Internet of Things

Digital technologies in general have seen steady growth in 2021, gaining momentum that is expected to continue through 2022. Added to this are signs that the shortage of semiconductor chips may also begin to ease. by the second half of the year, which is very good news.

During the pandemic, the Internet of Things (IoT) has grown in popularity, mainly due to remote working, triggering a wave of private purchases of smart devices, wearables, personal computers and telephones. mobiles. At the organizational level, we are also seeing a shift in spending habits towards more sustained investment in their digital initiatives as they strive to modernize their systems to accommodate a changing workforce.

This business transformation will also be supported by the increased availability of 5G. It delivers more reliable data transfer, higher bandwidth, and lower latency to the next generation of IoT and digital devices. This, in turn, will continue to drive cloud migration: with increased growth in infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service ( PaaS).

Health industry, Biotech

Expect the science of genetics to continue to bring massive changes to the world around us. The mRNA technology used in Covid-19 vaccines is just the tip of the proverbial iceberg. The research is getting bigger and bigger, with new discoveries almost every week. Health care will inevitably become personalized around the human genome, with the emergence of more personalized medical treatments based on individual DNA characteristics. There are already a growing number of gene therapies in the works.

We must therefore consider how medicine and the life sciences are increasingly collaborative in the development of new innovations. There is exponentially more data being shared between pharmaceuticals, biotechnology, biology, biomedicine, nutraceuticals, neuroscience and a host of environmental sciences than ever before.

We are also seeing an increase in digital assessment and diagnosis, from remote medical appointments to virtual clinics and wearable IoT health devices of all kinds. Virtual diagnostics and telepractice are becoming widespread.

Machine Learning and AI, The Rise of Bots

Artificial intelligence (AI) will also continue to advance by leaps and bounds, along the path to becoming the most transformative technology of all time. Machines may not be quite ready to replace human workers in 2022, but we work with or alongside machines that use cognitive processes every day. Every day we engage with more and more artificially inspired agents at the service level, with low-code and no-code AI being used to build increasingly complex engagement.

In marketing, AI refines qualified leads into more conversions. In engineering, AI and machine learning are used to predict wear and to plan maintenance interventions. In cybersecurity, Ai learns to recognize patterns that suggest types of cybercrime.

Renewable Energy, Sustainability

Since the dawn of the pandemic, the only form of energy that has seen an increase has been renewable energy and the International Energy Agency (IEA) estimates that up to 40% more renewable energy will be generated and used in the year 2022 alone.

Beyond that, emerging energy sources such as biofuels, liquid hydrogen, and even nuclear fusion continue to become more viable. We have seen an unprecedented number of extreme weather events and other climate impacts take a toll on people’s lives and health in 2021. It is difficult to argue that these increasingly severe extreme weather events, which are killing thousands of people and disrupting millions of lives, are caused by global warming. Deny.

That’s why the upcoming COP26 global climate summit in Glasgow in November is also expected to boost investment in sustainable energy and emissions reductions even further.

Crypto currency, bitcoin

Over the past decade, cryptocurrency has proven to be very lucrative. It has outperformed stocks, commodities, oil and even gold, not only as an apparent hedge against inflation, but also against systemic risk. Nevertheless, it remains a highly volatile medium of exchange.

Bitcoin first broke above $1,000 in early 2017, then rose rapidly to briefly touch around $20,000 before falling back towards the end of the year. As the Covid-19 pandemic started suddenly, in October 2020 bitcoin surged above $10,000. It then climbed to around $65,000 in April 2021. Despite several dips and recoveries, it is currently hovering around $60,000; hardly the kind of stability one would expect from some form of global exchange.

In 2022, we’re likely to see more big names consider bitcoin payments for product purchases, with Amazon and Tesla toying with the idea in 2021. Countries, especially those in the developing world, may soon follow. El Salvador officially adopted bitcoin as legal tender in September 2021, drawing praise from parts of Latin America and Africa.

The ban on mining operations by China and the stricter regulations imposed by the US Treasury have affected the crypto, but to a lesser extent than expected. These currencies will have to accept future regulatory and legislative measures to prevent their use for money laundering and other illegal purposes, but this will hopefully serve to ultimately strengthen them by making them more stable. .

Nevertheless, since the crypto market is still marked by uncertainty and speculation, it is best not to invest what you cannot afford to lose.

So what should you do?

Don’t fall into the trap of assuming that your investments only need to be reviewed infrequently. Markets are more dynamic than ever, and you need to be ready to change tactics or seize opportunities instantly.

Beware of opportunistic projects and projections. Do your research and make sure you are engaging with a bona fide entity. Formulate an overview of a variety of investments based on value and potential and maintain diversity in your portfolio. Don’t be afraid to be proactive. And don’t rely on luck. Be smart in 2022 and beyond.

Jacobus Brink (Head of Investments at Novare Investment Solutions)