The next decade will see the growth of three primary investment trends that will have a major impact on demand for specific financial products: women entering the investment arena, the aging population and global economic uncertainty.
Combined, these three trends will
Investment By Women – Different risk appetite and investment strategy
Women live longer and experience different salary curves over their lifetimes than men, all details that traditional financial advisors and robots don’t take into consideration. For example, during childbearing years, women tend to earn less and contribute less to their pension or investment portfolio, which sharply changes when they re-enter the workforce. And when they do, they are closer to the retirement age than their male counterparts when they enter the investment game, which means they can take fewer risks with their investment. On the other hand, since women tend to live longer, so they’re more likely to look for financial products that can provide a stable return over the longer course of their retirement. Studies show that women are also more goal-directed in their investments and trade less. For instance, women are more likely to pick a target-date fund in their employer-sponsored retirement account. Women also generally invest more of their income and are willing to wait longer for payoffs.
Traditionally, men have scoffed at these investment strategies, but in fact, they can pay off, and within ten years, investment firms hoping to stay relevant and competitive will have created models specially adapted to these distinctive investment patterns. They’ll also be able to cash in on women’s tendency to seek advice from professionals rather than taking a “DIY” approach to investments.
Aging population – Longer-Term Investment Bias
The aging population is not only a challenge for the healthcare system and a dilemma for
Income property is particularly attractive for this type of investor since it provides a steady supplemental income for when they retire, as well as stocks that pay periodic dividends. This trend should make pension funds happy overall; however, even though the aging population may demonstrate a lower risk appetite, savvy investors are still looking into alternative investment classes and are paying close attention to trends. They have lived through quite a few financial crises, and they need a contingency plan in case things go south. Because they plan to use much of their savings to improve their health and deal with health crises as they arise, this age group also prefers their investment to be fairly liquid.
We’re living in an era when there always seems to always be a crisis right around the corner, and that means investors in all demographics are looking for ways to secure their investments, increase stability and liquidity, as well as select products that are likely to withstand the test of time. Over the coming decade, this trend will feed the expansion of the market of new financial products that can satisfy this demand. Each new asset class offers investors a glimpse of hope for improved odds of beating the market or other benefits such as flexibility of trade, improved liquidity, or fit with global market direction.
For example, the trend towards asset tokenization is creating opportunities for fractional ownership of such assets as real estate, luxury goods, and private equity. Even though private equity is ordinarily a high-risk investment, the ability to easily liquidate it prior to the exit event lowers the overall risk profile for the investor groups and trends outlined above. Real estate, which is a traditional asset class that appeals to both female and aging investors, as well as a powerful value-preserving asset in times of economic uncertainty, is now accessible to investors with much lower investment thresholds due to fractional ownership.
When these threats and trends are combined–the rise in women investing, the aging population, and increasing economic uncertainty–the result is increased demand for products with the following features:
• Longer-term positioning
• Lower risk appetite
• Broader portfolio diversification
• Basic forms of investment, such as real estate, especially yielding
• Products representing essential consumer products that will be in c constant demand
• Health and foodtech investments that promote the values of this population, as well as long-term consumption
• New asset classes that improve investor position without significantly
Another major factor redefining and upgrading the structure of traditional securities is blockchain. Blockchain-based security tokens, while they possess traditional attributes of a safe investment asset class, also enable innovative features and investment strategies, creating flexible financing schemes for companies that fit their business models and go-to-market plans. Tokens offer both investors and asset owners a high degree of flexibility: they can represent the right to equity shares in a company, the right to share in profit, a loan or any other debt obligation. Tokens can be backed by real assets like real estate and represent a unit of a mutual fund or collective investment
Tokenized participation in an investment fund carries the benefit of liquidity, as well as higher transparency with respect to asset valuation at any given time. With their combination of higher liquidity, the solidity of real assets, low entrance thresholds, and the ability to invest in assets that support the investor’s values, this new asset class is ideally suited for the three trends described here, meaning that security tokens are likely to be an excellent fit with the major upcoming trends of the next decade.
The trend toward blockchain and security tokens, while it has tremendous appeal to these demographics, requires the underlying infrastructure of a solid technological platform specially created for issuing security tokens for a variety of assets. This platform would ideally create a secure and seamless process for funds, governments, corporations, and nonprofits to tokenize their current or expected assets, revenue streams or IP, as well as to issue securities to raise funds for discovery, expansion, development and overall, value generation.
DGCAMP for Himalaya Labs provides this type of blockchain and smart contract driven platform, offering issuers access to a broad class of primary market investors, guided through a variety of automated transactions and processes in order to issue a broad array of digital assets to investors without intermediaries.
Looking at the way financial technologies and asset classes are already being reinvented for the coming decade, one thing remains constant: since the dawn of investment itself, there really has been only one single goal –the desire to beat the market. What we’ve seen changing from decade to decade is the makeup of the investors, and these changes necessarily influence their position and their risk appetite.
Anticipating the transition to a streamlined investment process and increased liquidity and availability of global investments to investors at lower thresholds, security tokens seem like the next logical step: the perfect fit for the top asset class of the coming decade, centered on a platform which can facilitate issuing and utilizing those tokens to raise funds and facilitate trade.
As the financial and investment space grows more and more decentralized, companies will be able to eliminate or reduce intermediaries in the securitization process; this, in turn, will potentially increase opportunities for innovative companies with high-quality offerings for accessing adequate financing. While the gold standard for the security token industry has yet to be developed, platforms that factor in the industry’s current and future investors will emerge as leaders in this market, driving the greatest growth over the coming decade.