Charles Darwin once said that it is not the strongest of species that survives, nor the most intelligent, but the one most adaptable to change.
While Charles Darwin may have been referring to nature, his commentary has never been truer than in the current business environment.
Each year to help you stay a step ahead through this constant change, Crowe Howath distils the views of its financial advisors, investment analysts and economists into 10 themes. These themes aim to make sense of the world and outline how investors and businesses can take advantage of these trends.
Jeremy McPhail, Head of Research at Crowe Horwath said with change being the only constant and innovation causing rapid boom and busts of industries, investors should be making more active investments for their portfolios. Businesses also need to be more agile to be prepared for changing market places.
“We have seen companies like Nokia, a mobile phone giant dwindle to only three per cent of the global smartphone market by failing to meet the needs of an ever changing space. Companies which invest time and resources into reinventing themselves and their products or services are the foundation for any well performing portfolio and provide good examples for good business practice,” Jeremy McPhail said.
Companies investing in research and development and embracing technology to increase market share – like blood biotherapy company CSL and one of Australia’s largest companies – will be worthy of investors’ attention according to one idea.
Other investments identified in this year’s paper include Australia’s travel industry which is likely to benefit from the changing demographic shift as baby boomers retire and look to travel.
“To take advantage of this, over the medium to long term, we are increasing clients’ exposure to major airport infrastructure assets such as Sydney Airport which is forecasting consistently increasing passenger numbers, providing good room for capital growth as well as steady and sustainable income streams,” he said.
Here’s just a few of Crowe Horwath’s top ten ideas list for 2014:
- Change – The only real constant – Baby boomers approaching retirement are changing where consumption is occurring
- The innovators – Innovation is not just good for consumers but it is producing businesses that are more efficient and producing tangible shareholder value
- The new political regime – With businesses holding back spending due to the 2013 Federal Election, cashed up companies are likely to be looking at mergers and acquisitions in 2014
- Urbanisation and the growth of the middle class – Urban population is now greater than rural globally and will lead to different consumer spending patterns
- Infrastructure and property – the new annuities – Cash is returning less than inflation so look to mature property and infrastructure for income streams
The Ten Best Investment Ideas provides a roadmap for investors and businesses looking to navigate the political and economic changes which may shape 2014. Further information and supporting graphs to each trend are shared in a full paper about the year ahead.