Considering the Impacts of Globalization, Technology and Demographics on Investing
I’m seeing more and more discussion about the impacts of a changing US economy and the effects demographics will have on domestic growth in the years to come. I touched on this a bit a few weeks ago when I looked at what Research Affiliates’ Rob Arnott calls a “3D Hurricane” (Positioning for a 3-D Hurricane).
There’s little doubt in my mind these types of discussions will become more common in the coming years and I plan to write more extensively about it as information becomes available. The impact technology, demographics and globalization have on economies around the world should not be ignored. Don’t anchor your ideas on history and make sure to recognize that the future is probably going to be a lot different than the past. Having a plan for dealing with ever changing global economies and dynamic investment environments is critical to long-term success.
“Likely, we have entered a period of secular stagnation heavily impacted by lingering debt overhangs, persistent demographic shifts in savings preferences, and increased efficiency of capital. No doubt a global savings glut has been a contributing factor, but one that will dissipate more quickly than these longer-run trends, which are powerful and long lasting, and will impact our economic outlook for many years to come.” – Shane Shepard, Research Affiliates
Here are a few recent pieces from some really bright people that touch on this subject. While I don’t agree or endorse all the ideas in these articles, they are extremely thought provoking and worth paying attention to.
- Warren Buffet – Better Than Raising Minimum Wage (search this title in Google to get around the paywall)
- Stan Druckenmiller – Druckenmiller Sees ‘Massive’ Problem Caused by Aging
- Shane Shepard – Slow Growth: A Tale of Two Theories
- Daniel Drew – The End of Meaningful Work: A World of Machines and Social Alienation