Investors are already in the spirit of 2014. In many parts of the world economies are recovering better than expected. The global markets rally can keep rolling into 2014 and beyond, some investment managers try to convince their clients. Fears of correction or slump are merely annoying disturbance for a growing number of market participants.
Investments in Dubai are stimulated by the bright hope this year’s 87% rise of the DFM will continue in 2014 and property prices which already reached the highest possible increase for the year will keep rising in a true Dubai fashion – “the highest property prices in the world, “the biggest increase over a year” or even may register a new Guinness record.
However, we want to highlight a forward-looking 5-sector investment approach for the years to come. There are five macroeconomic areas that over the centuries define how societies succeed.
Food
Commodities will always be in demand and even with precious metals correcting now, the investment theme is hotter than ever. If you want to become rich, become a farmer. The UN, IMF and World Bank estimate over one billion of the planet’s seven billion people are poor, undernourished, surviving on two dollars a day. UAE’ food prices are the 3rd highest worldwide and the prospects of rapid population increases are nearly x-potential at least for the coming 7 years until the World Expo 2020 takes place. The future of farming offers diversified opportunities from fertilizers, pesticides, irrigation to genetically engineered seeds. Commercial opportunities such as restaurants and speciality supermarkets chains are also very promissing.
Water
The new gold for 21st century investors is water. It is not available everywhere, while it is essential for drinking, industry, agriculture, transportation. Business media call water the “new gold.” Water generated over a half trillion dollars in revenue worldwide in 2010. As world population accelerates from 7 billion today to 10 billion by 2050, as more than one billion “lack access to clean drinking water,” it will soon “trade like oil futures.” For many, water is more valuable than fuel. Investors may consider taking positions in bottled water companies, purification, desalination.
Agriculture
Land banking and land development are not new investment themes. Owning farmland is a solid bet on the future of developed economies and emerging nations. Critics call it “land-grabbing” when rich nations buy the agricultural assets of poorer nations. But rich or poor, populations are exploding, demanding better lifestyles, all needing more food. So today there’s a global rally in productive agricultural properties, thanks to possible 25% returns.
Ozone Protection
Geo-engineering future climate change Yes, human activities, autos and manufacturing plants produce carbon dioxide and other gases that escape into the atmosphere and destroy the protective ozone or absorb and reduce solar energy. Innovative geo-engineering plans are under development to explore using space rockets to block harmful sun rays, reduce global warming, reverse climate change.
Lifestyle Demands Increase
We all want more, more! Greed drives not only the stock markets or the property markets. Worldwide, most people now have their own version of the American Dream or Dubai Dream. In fact, we are all capitalists, the rich, middle class and poor want more. Witness luxury-car sales in China, microloans for entrepreneurs in India. Accelerating lifestyle demands are driving all nations to increase resource use to the same rate as America today — 32 times more resources and dumping 32 times more waste — when our world will soon need six Earths to survive. Overconsumption? Ride along with the optimists, imagine an investment strategy like a plot right out of that great movie “Avatar.”
