Investment trend is the general direction in which financial markets or specific assets move over time. It encompasses observable shifts that reflect macro and micro economic forces, such as rising demand for electric vehicles or falling interest rates. It can also be a way to identify potential risks in particular sectors or industries. Investors who spot trends early and get in at the right time can reap major rewards.
The constant stream of US trade tariff news has heightened market volatility in recent months. It is not yet clear when the saga will end or what the final outcome will be. This uncertainty makes it difficult to forecast the economic outlook, especially for businesses who have trimmed their full-year guidance amid the hazy trade backdrop.
As a result, investors are being more selective in their choice of investments. Some are rethinking their geographic asset allocation in favour of cheaper markets. They are also looking for opportunities in a range of emerging sector – including those that benefit from the growing adoption of artificial intelligence.
Other investors are seeking to reduce exposure to higher-risk assets as interest rates ratchet up. They are reassessing the role of bonds in their portfolios and considering options such as property, shares or cash. Unlike other investment products, bonds offer a fixed rate of return which may be attractive in the current low-rate environment, but they do not provide any protection against escalating inflation, as would be the case with shares and property.