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Can Sociocultural Trends Impact Investing?

The society plays a big role in shaping the way we do business. And because society is ever changing, that also means that trade and markets can also change.

Take water in a container as a metaphor. The water has no shape but it can take form when placed in a container. It will depend on another object for it to have a structure. The water is the trade and market while the container is the society that helps build it. These changes can impact our economy either in short or long terms. That is why, knowing the shifts in our society can help us be better investors in the future.

Here are some of the most felt sociocultural trends that help people predict the movement of our economy.

Millennials and housing

Millennials are the biggest demographic to become house owners

It’s felt in almost every corner of the globe that Millennials are the most judged demographic today. They have been labeled as overly sensitive, financially irresponsible, and just kids who just want to travel. Statistics also show that this generation is not rushing into moving out of their parent’s house.

Despite the many negative notions and myths about the Millennials, studies show that they are just as financially conscious as the Baby Boomers. Millennials who are born between the years of 1982 to 2000 are shown to be the largest group of home buyers. They are saving up to buy private spaces instead of renting and that is one of the reason why they take more time before moving out.

This data shows that real estate will become a stable form of investment in the next 10 to 15 years. This also gives a trajectory that almost 1.35 million houses will be built every year.

Digitization

Ecommerce like Amazon, e-Bay, and Alibaba are three big crocodiles in the lake of retail. The digitization of the world is starting to make huge shifts in business and the faster we can adopt to it, the better. One of the most relevant changes is the closing up of some brick and mortar retailers like Sears and Toys ‘R’ Us.

Digitization is a good opportunity for small and independent brands to help get their products across to more consumers. It is also a good time to start a small e-commerce business since most of the people are already smartphone users. The technology’s effect on consumerism is not slowing down, rather it continues to swell up in the next decade.

The retirement phase of the Baby Boomers

According to recent survey, almost 10,000 Americans retire everyday. This means that people who are selling insurance will be busy in the next few years. And since retirement is due to old age, it means that high demand for medication and prescription drugs will be felt.

Besides these, health care professionals like caregivers, nursing, and pharmacists will be very much in-demand. Students who are not yet enrolled in college may want to consider taking these degrees to have a higher shot of being employed.

Impact Investing

Lauren Singer is becoming an impact investor by opening her own zero-waste store

Millennials in the work force are not only concerned with making money but also wish to contribute positively to the environment as well. Videos and articles are flooding the internet how this generation is looking more closely on impact investing. This is when a company aligns it goals with what can benefit the environment.

Businesses in the field of recycling, reusing, and reducing is a thing to watch out for. Expect to have more stores that promote zero-waste concepts incorporating plastic bottles, straws, and containers in their goods. In a recent survey conducted by Toniic, 79% of Millennials consider themselves to be impact investors who look out for the economy and the environment.

Infrastructure

Governments across the globe are looking towards making the world a bigger but yet more connected place. People are craving for better roads and stable bridges that can help them get from point A to point B comfortably. Not to mention more and more people are buying cars, congesting roads as a result. This means that there is a rise in infrastructure. There will be a $50 trillion budget that is expected to be poured down in this sector’s investment till 2030.

Businesses in construction can definitely rejoice with this news. It’s also a good opportunity to buy stocks in these companies given the positive trajectory.

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