Investing for 2030 – Are you ready?

What will the world look like in 2030?

It’s an interesting question. With the rapid rate of technological change that has taken place, especially during the pandemic, the picture of 2030 is hard to imagine. Most of us struggle to look ahead more than a few weeks.  

Predicting the future with any level of accuracy is no easy task. If we’re to go by Elon Musk’s framework of 2030 predictions, expect to see humans having reached Mars, and space colonies. If we’re to go by The Simpsons cartoon (which has successfully predicted 17 future occurrences), then we’re likely to see Ivanka Trump running for president, a digital Big Ben and a possible doomsday event.

In the investment world, financial services company Capital Group has put together a more realistic 2030 prediction list of ten predictions that are likely to eventuate for long-term investors. Most investors are focused on their long-term goals, such as retirement and funding their children’s education. But besides these two goals, investors rarely consider what may occur in the future and how it may affect their lives and their financial position.

Here are Capital Group’s highest-conviction predictions

1. Healthcare will hit warp speed. While its hard to predict specifics, portfolio manager Richard Wolf says, “by 2030 many of us will have devices that will analyse blood, do cardiology monitoring and even remotely check our breathing while we sleep, some of which are already available.” We can already see a wave of innovation sweeping through the healthcare sector with the likes of the Apple Watch, so breakthroughs in diagnostics to detect illnesses earlier are likely to occur.
2. A cure for cancer may be around the corner. Portfolio manager Cheryl Frank says “a cure for cancer may be closer than you think. In fact, I believe some cancers will be functionally cured with cell therapy between now and 2030.” A new way of testing should help eradicate cancer through early detection.
3. Cash will be a distant memory. Portfolio manager Jody Jonsson says, “digital payments will be the norm, and people will give you odd looks if you try to pay with cash.” This is already happening in Beijing where people pay using facial recognition technology.
4. Semiconductors will be everywhere – and in everything.  Says portfolio manager Steve Watson: “Over the next decade, I expect chipmakers to be working overtime to satisfy the robust demand for semis across industries.” 5G will soon enable a web of interconnected digital devices to talk to each other, all requiring semiconductors. A decade from now, and everything will be digitised.
5. Wearable technology will blur the lines of reality. Portfolio manager Mark Casey says, “In 10 years, I think there will be devices powerful enough to make real-time translation a reality. Perhaps wireless earbuds translate the voices and smart glasses do the same with foreign text.” Devices like these could transform the tourism sector.
6. Digital entertainment will take centre stage – Investment director and equity analyst, Brad Barrett says, “the video game industry will likely continue its explosive growth into the next decade. I also suspect virtual and augmented reality will become more mainstream.”
7. Autonomous vehicles will hit the fast lane – Portfolio manager Chris Buchbinder says, “I think in 2030 we will have broadly deployed fleets of autonomous electric vehicles operating in cities throughout the world. Ownership of a personal vehicle will go from being a necessity to a luxury.”
8. Green machines will rule the road – Portfolio manager Kaitlyn Murphy says, “GM’s recent announcement to go all-electric by 2035 signalled an inflection point for the auto industry and was followed shortly by Volvo’s promise to only produce EVs by 2030.” As an investor, look for not only automobile companies, but ones that roll-out subscription packages to manage the battery, in car entertainment and safety.
9. Renewable energy will power the world – Equity portfolio manager Noriko Chen says, “We are in the early stages of the transition to an electrification of the grid and green energy, and there are strong tailwinds that could drive growth through 2030 and beyond.”
10. Innovative companies will make the world better – Equity portfolio manager, Anne-Marie Peterson says “we are living in an incredible time of change. Change drives opportunity for active investors like us.” Look for companies whose products or services can improve the world.

One thing that is certain, is that there will be individual companies that do interesting things. Capital Group says buying them at a reasonable price and holding them is key to achieving above average returns. Capital Group’s job is to find those most likely to get it right and create wealth over time so that their investors may benefit. What that price may be, is anyone’s guess.

Ishan Dan

Ishan is an experienced journalist covering The Inside Investor and The Insider Adviser publications.