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Investors should look at new businesses that have given good returns in the past to determine their future strategies, but this approach will only get them so far – and ignores the promise of things to come. Before deciding what to invest in, it's important to consider what the future might bring and which sectors might be on the rise.
So if you want more than the measly 1% or 2% offered by the bank, you have to ask yourself which industries have the most potential. Last year was a mixed year, with some industries taking a hit and others seeing a rise, so investors should look at new businesses.
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In general, there has been great volatility in interest rates and global trade, which impacts virtually every industry to some degree. The trade war has had a negative effect on companies that rely on a global supply chain.
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Boeing's problems with its 737 Max aircraft have caused problems across the aviation industry, and the Iran crisis is causing concern about the impacts on the oil industry. In this environment, finding opportunities for growth is a challenge, but not insurmountable.
Why should investors look at new businesses for the future?
The key is to identify which industries will boom in the future. During the dotcom boom, many people didn't really understand the magnitude of what was happening at the time – yet some of the technologies that emerged from that period permanently transformed the way people live and do business.
And yes, the “boom” was followed by a bust, but that doesn’t make the phenomenon any less relevant. Many companies that were founded as part of this boom still exist today, and early investors have reaped great rewards. So which industries have the greatest potential for growth in the coming years?
1. Blockchain technology. First, let's be clear. By “blockchain” I don’t mean putting your money in bitcoin, an alternative blockchain-based currency, which can be risky.
On the other hand, “blockchain” technology has the potential to be a big winner. Technology can bring about dramatic transformations, offering foolproof ways to seamlessly track end-to-end supply chains and handle large-scale “smart” contracts, so investors should look for new businesses.
It offers faster, more efficient payment processing and a way to enforce proof of ownership. However, despite the potential operational benefits, most companies are only in pilot mode, and full implementation is still at least a few years away.
Read More: Investments for beginners: everything to get you started investing
2. Cannabis and CBD. Dramatic changes at both the state and federal levels have created a new, rapidly growing market.
At the federal level, CBD, which offers some of the therapeutic benefits of marijuana without the psychoactive effects of marijuana, only recently became legal in specific cases with the passage of the Agricultural Improvement Act of 2018 (the “Farm Bill”), which enabled the cultivation, harvesting and distribution of hemp and hemp-based products, from which CBD is derived.
Cannabis and its non-psychoactive cousin, CBD, have become a large-scale, fast-growing industry, and major tobacco companies like Imperial Brands and Altria have invested heavily in this emerging growth area, effectively solidifying their future and giving a return to years of tepid returns.
Interestingly, a number of cannabis exchange funds have also been introduced recently, offering investors an easy way to enter this market.
Still, the legality of CBD is in a gray area: regulatory issues are being worked out, and cannabis is illegal at the federal level, which could pose some risk to the future of some cannabis companies, even if they are operating in states. who legalized it, which are issues of focus for investors if they look at new businesses
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