How far out can you make investment decisions on a megatrend like aging demographics in a longevity society? Well that depends on how “far out” your mind will allow you to go before your probability barometer bursts.
Over the last several years, if you are one of many small businesses, that has invested in marketing products or services to a 50-plus market then you did so knowing the demographics were predictable, and that this multi-segmented market with its decent disposable income will spend for a reasonably foreseeable time. Yet even if you have done your research as a smart “age-friendly” business, you still have to keep your eyes on the trends, attitudes and values of your customers and adapt accordingly.
What if you are in the nose bleeding altitudes of investment firms, banks, wealth management and insurance companies, how far out are you? Two decades may be the acceptable answer. At the May 2016, Milken Institute Global Conference, among the many wide-ranging panel discussion topics, some of which you can view on YouTube, was one titled “Thematic Investing and Portfolio Strategies: Betting on the Megatrends”.
On a macro scale, the five panelists discussed global investment strategies related to more than one megatrend, but no surprise, one of the megatrends frequently referenced was aging demographics and longevity. An example of one investment “asset allocation” area highlighted on this panel was seniors housing and real estate. As I’ve commented on this in many posts over the last few years, it is safe to say this trend within the megatrend has arrived.
Which brings up a point that panelist Mike Ramsey, Partner and Chief Investment Officer, Global Credit at Generation Investment Management made regarding the two-decade megatrend watch…“it takes about five years before you realize you are in one.”
On this longevity megatrend, as with the others mentioned, the five years is up, so now does it not make sense to pay attention to where the money flows over the next fifteen years? As I step back from watching the video, I think what this Milken panel gives strong suggestion to, is start connecting the dots from current trending on longevity patterns, to making sound, more specific investments in traditional and emerging areas like health care and life sciences.
Not trying to overemphasize this longevity megatrend, there were a number of other topics featured at the Milken conference that plug in on the theme, including some invitation only sessions with no video.
Here are a few to catch by my invitation.