Global Investing

Global Investing

U.S. investors tend to stay close to home, prioritizing domestic stocks and funds. But non-U.S. markets comprise 57% of global investment opportunities, which means that close to half of those opportunities exist beyond U.S. borders. Some of the world’s largest technology, energy, and financial companies are international, such as Samsung in South Korea, Mitsubishi in Japan, ING in the Netherlands, and Allianz in Germany.

What Is Global Investing?

For many investors in the U.S., going “global” means investing in European companies. But this is a limited — and limiting — view of global investing. There is plenty of energy in non-U.S. and non-European markets around the world, from Southeast Asia to South America to Africa and beyond. 

Global investing means taking all of the markets around the world into consideration and putting some of your investment dollars in stocks and funds outside of the U.S. and Europe. 

Global Fund vs. International Funds

In the world of investing, “global” and “international” are not interchangeable terms the way they are in other contexts. Global funds and international funds are distinct, with different rules, goals, and opportunities.  

Global funds are comprised of securities from around the world, including the investor’s home country. Global funds give investors the chance to diversify and reduce country-specific risk while still including their own country in their investment portfolio. 

International funds, on the other hand, contain securities from around the world with the exception of the investor’s home country. These funds are a way for investors who already have a robust domestic portfolio to diversify outside that sphere. 

Why Invest Globally?

Investing globally — and for U.S. investors, specifically beyond the U.S. and Europe — is an effective way to reduce risk in a portfolio and also opens up the door to investing in all sorts of opportunities that don’t exist in one’s home country. 

As we pull out of the acute phase of the coronavirus pandemic, the economies of emerging-market and developing economies are projected to grow faster than the United States. These countries are on track to be the largest contributors to global GDP by 2042, and by 2050 will account for almost 60% of the world economy.

Accordingly, developed and emerging markets are beating the S&P 500 so far this year, with China, South Korea, and Japan showing strongest growth. In fact, some analysts are predicting that foreign equities might outperform U.S. stocks as a whole in 2021.

The growth of global funds in particular is a huge opportunity for investors. PwC predicts that global assets under management will reach $145.4 trillion by 2025, almost double the $84.9 trillion that was under management in 2016.

Investors who overlook these opportunities are limiting their ability to diversify, which increases risk in their portfolios. Owning a globally diversified portfolio protects investors against seeing serious losses when stocks in one country suffer setbacks that aren’t felt elsewhere.

Overlooking global investments also causes investors to miss out on some phenomenal investment options. There are exciting things unfolding in business around the world — in Brazil and China and Eastern Europe, for example — and U.S. investors who aren’t tapped into global options will lose a chance to capitalize on that energy. 

How to Invest Globally

While global investments are unlikely to make up a majority of a U.S. investor’s portfolio, it’s a good idea to target a sizable chunk of assets to invest overseas. According to Christine Benz, Morningstar’s director of personal finance, professionally managed asset allocations typically target 25-33% of the portfolio in overseas investments. This can be a good benchmark for individual investors to look to. 

Investors can add global investments to their portfolios by buying stocks or exchange-traded funds (ETFs).

Stocks 

There are a number of ways to invest in foreign stocks. U.S. depositary banks issue American Depository Receipts (ADRs) that attest to a right to ownership of a share or fraction of stock of a foreign company that trades in U.S. markets. U.S. Investors usually find it more convenient to own the ADR instead of the share of foreign stock itself. Alternately, depositary banks in an international market, usually in Europe, issue Global Depository Receipts (GDRs) that attest to ownership of shares in a non-U.S. company. GDRs are available to institutional investors in and outside the U.S.

Some investors may find it advantageous to invest directly in the stocks or bonds of foreign entities, perhaps with an eye toward acquiring a decisive stake in a company. This is not a good strategy for the casual investor, as there are many complex factors involved in these transactions, such as tariffs and trade barriers.

Exchange-traded funds (ETFs) 

ETFs group many different stocks or bonds — sometimes thousands — into a single fund that is traded on the stock exchange like an individual stock. These funds can focus on global stocks and sometimes have a regional focus. Individual investors are not allowed to buy mutual funds that are based outside their home country, so investors should buy a fund based in their own country that includes global investments. 

4 Ideas to Remember About Global Investing

Global investing is a good strategy for those who want to reduce their risk, open themselves up to exciting new opportunities, and become more sophisticated in their investing approach. Here are four important ideas to remember when considering global investing:

  • U.S. investors should look beyond Europe to truly diversify their investing globally. Great opportunities exist in regions all over the world. 
  • Global investing allows you to diversify your money and mitigate your risk so that when stocks in a given country take a hit, your portfolio stays strong.
  • Being open to investing beyond the U.S. and Europe opens up many phenomenal investment opportunities that you may have not known existed. 
  • Global funds are a fast-growing and potentially lucrative investment opportunity.

Unlock a World of Investing with a Free Magnifi Trading Account

START INVESTING TODAY

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today. 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]


Gender

redirect for gender


https://magnifi.com/securities?query=Gen%20X

Gen X

Redirect for Gen X


https://magnifi.com/securities?query=Philanthropy

Philanthropy

Redirect for philanthropy


https://magnifi.com/securities?query=Demographics

Demographics

Redirect for Demohgraphics


Entrepreneurship

Redirect for Entrepreneurship


Women

Women redirect


Millennials

Unlock a World of Investing with a Free Magnifi Trading Account

START TRADING FOR FREE

 

There are 75.4 million Millennials in the US, making them the largest living generation and the largest generation in the labor force. But who are they?

The strict definition of a Millennial is someone who was born between 1981 and 1996. They were raised with technology (using computers as early as grade school) so it’s no surprise that they are tech-savvy; they are efficient, valuing work-life balance and time with their families; and they are achievement oriented and they want to make a difference beyond their workday. 

When it comes to buying, they care about more than the price— they care about a company’s core values. That’s important because Millennials are responsible for $1.4 trillion in annual buying power. Just like Millennials have different professional priorities and personal goals than their parents did, they spend their money differently. 

What Is the Millennial market?

Millennials have a reputation for being broke. That’s kind of true. 

American Millennials are financially behind compared to Generation X and Baby Boomer generations for a few reasons. These include student debt, a higher cost of living, and the financial crisis that limited well-paying jobs upon graduation. 

Nonetheless, Millennials are educated. 

39 percent of Millennials have a bachelor’s degree or higher. But, while Millennials tend to have more education than their grandparents, they have loans to show for it.  In 2019, student-loan debt reached $1.5 trillion, with the graduating class of 2018 owing an average of $29,800. 

While that kind of education debt is a burden, no doubt, an education makes a difference in Millennial earning power.  

According to the Pew Research Center, in 2018, Millennials who had earned a bachelor’s degree earned $56,000 on average.  That is a stark contrast to Millennials with only some college education who reported earning nearly $20,000 less on average. For many, that’s the difference of being able to afford a house, a family, and other milestone expenses. 

Millennials aren’t just strapped by debt. The incomes offered by available jobs haven’t kept up with the cost of living. While there has been a 67 percent growth in income, according to Student Loan Hero, it isn’t keeping pace with the cost of living. 

Nonetheless, Millennials are spending, and spending differently. Just like they want more out of their work than hours logged, they want more out of their spending than a good deal.  

Why Invest in the Millennial Market?

Millennials are more interested than ever about what they are consuming. From food, to cosmetics, to cleaning supplies— a Millennial might naturally ask, what’s in it? Approximately 41 percent of Americans intentionally seek out products with the clean label designation. Nearly half of these 41 percent are under the age of 35. 

This is particularly true for food products. Millennials tend to have an interest in eating fresher and more naturally. Case in point: Millennials are the largest group of organic shoppers. This trend is particularly true for Millennials who have children. 

If you consider that farm-to-table products and convenience meet harmoniously in many meal kit delivery boxes, you then won’t be surprised to learn that Millennials are also more likely than any other demographic to order meal kit services.  

Millennials also like to eat out, less at places like McDonalds and more for new and unique experiences. According to the 2018 US Consumer Expenditure Survey from the US Department of Labor, Millennials spent 47 percent of their food budget on food away from home, more than all other groups. Even before the pandemic, 67 percent of millennials were more likely to choose a restaurant that delivered.

When it comes to food and drink, higher quality overrides price. (One study even finds that Millennials spend more on craft beer than their cell phone and utility bills!) 

In the same way Millennials want to know more about what’s in their food, they want to know more about, well…everything they do, and why. Often, they do this on their phones. 96 percent of Americans under age 29 own a smartphone, according to the Pew Research Center. In the past year, 64 percent of Millennials paid to download at least one app, and approximately 20 percent of those sought to purchase an app monthly. They are willing to share their information (in safe and secure digital platforms) in order to use innovative and convenient services like Uber, Lyft, and Airbnb; meal delivery platforms like GrubHub; subscription services and more. 

They also do a lot of online shopping from their phones. According to one study, 35 percent of Millennials reported that they can’t live without Amazon, only to be followed by Gmail (30 percent) and Facebook (29 percent).

Millennials are leading the adoption of wearable technology that tracks trends and gives feedback. (Millennials love feedback!) In other words, they are trying to do things a bit smarter than they could without the data tech offers. 

Beyond eating better and self-improvement, Millennials have taken their videogame habits into adulthood. Millennials grew up with videogames, and so it should be no surprise that two in three Millennials in the US play video games every month. 

They also like watching other people play video games— driving the eSports industry. According to the Entertainment Software Association, the average gamer is 34 years old — or, a Millennial. In 2020, the global video gaming industry saw $180 billion in spending, topping sports and movies globally.  

When it comes to work, even before the pandemic, Millennials liked working from home. They like flexibility and efficiency, and they are tech-savvy enough to avoid the need for a printer and opt for document sharing on the cloud, instead. 

Millennials might be at a disadvantage financially, but they shouldn’t be discounted. They are willing to spend more on better quality, rather than seek out the best deal. As they do things in more data-driven ways, they will lead the adoption of the next wave of technologies.

[/vc_column_text]

Unlock a World of Investing with a Free Magnifi Trading Account

START TRADING FOR FREE

 

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today. 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]


Seniors

Unlock a World of Investing with a Free Magnifi Trading Account

START TRADING FOR FREE

 

When considering the economic impact of senior citizens, it all starts with “the longevity economy.” That is: People who live longer, work longer, and buy more over their lifespan. Longer lifespans are good for the economy.

The catch, of course, is that longer lives don’t necessarily mean healthier lives. Therefore, we can anticipate greater demand on the healthcare system in the future. But we might also expect innovations in the form of tools that help manage chronic conditions, medications that contend with common diseases, and other initiatives that help keep seniors healthier for longer. 

Here’s what investors should know about the connection between aging and the economy.

What Is the Senior Market?

Aging isn’t what it used to be. In 1920, the life expectancy in the US for men was 53 and for women, 54. Life expectancy in 2017, almost 100 years later, was 79.6. By 2060, life expectancy is expected to reach 85.6. By 2060, it is anticipated that there will be nearly 100 million Americans who are 65 or older.

What does that mean for the economy? It’s not all bad.  

For one, seniors are working longer than ever. Among people aged 65 to 69, the labor force participation rate has risen from roughly 28 percent in 1998 to 38 percent in 2019 for men and from about 18 percent in 1998 to 30 percent in 2019 for women. In part, that’s because the senior population is also more educated than ever before, with some senior members still driving the economy with new and innovative ideas. For example, people between ages 55 and 64 made up nearly 26 percent of new entrepreneurs in 2017, according to the Kauffman Foundation. In 2007, that figure was only 19 percent. 

Why Invest in the Senior Market?

Even if seniors live healthier for longer, the growth of an aging population will inevitably mean increased healthcare costs. But, as the aging population swells, it’s likely that innovation will replace some of healthcare as usual. Healthcare for the aging population is likely to be driven by the following trends, which investors should consider. 

Streamlined Preventative Care: Lots of Baby Boomers have various chronic conditions, which they manage via medication, doctor visits, and preventative health care. These include diabetes, obesity, and high-blood pressure, among other conditions. Aging and comorbidities can also lead to more detrimental (and expensive) diseases including Alzheimer’s, diabetes, cardiovascular diseases, and osteoporosis associated with falls, according to a report by the Global Coalition on Aging. These and other conditions, including loss of vision, hearing, bladder control, or skin health, negatively impact independence and result in additional costs. 

Effective preventative care can decrease the rate at which chronic conditions deteriorate and more expensive healthcare issues develop. As seniors age, we can expect improved preventative care to be a primary focus of most health systems. 

Remote Patient Monitoring (RPM) Devices: Remotely monitoring patients is proven to have a big impact on health outcomes, including significantly decreasing the number of readmissions and preventing medical emergencies. For seniors, these devices can also translate to increased independence. 

While telehealth is more widely accepted, especially since the pandemic, so too is connected health. Connected health devices track health metrics remotely and have the potential to help the healthcare system manage the growth of the senior population. As we emerge from the pandemic and look to the swell of the senior population, we can expect industry growth for the remote monitoring devices designed for older adults. 

RPM devices are particularly helpful for managing chronic disease and post-acute needs, as well as ensuring patient safety. Notably, when used by patients and caregivers, they significantly improve both self-management of care and communication with clinicians. 

Immunization Imperative: In the US, vaccination recommendations for the elderly include those for seasonal influenza, pneumococcal disease, and reactivation of varicella zoster virus (VZV). In many countries around the world, regular booster shots against tetanus, diphtheria, pertussis, polio are also recommended in the elderly. That’s all before the COVID vaccine, which infectious disease specialists are hoping to make it into the arms of the elderly worldwide (and could potentially be added as an additionally recommended annual vaccination).  

It is anticipated that, as the elderly population grows, the annual societal economic burden for the four vaccine-preventable diseases will increase from approximately $35 billion to $49 billion. That amounts to a cumulative cost of approximately $1.3 trillion and more than 1 million disease-related deaths, before COVID. 

As the number of seniors grows, so too will efforts to vaccinate them, which will be good business for the drug companies that manufacture vaccines. 

In-Home Care: More and more baby boomers are “aging in place,” or planning to stay in their homes rather than move to a senior living facility. And it’s working, particularly because of increased preventive care and better management of chronic conditions. Improved home care can benefit the elderly and reduce associated healthcare costs, according to the Global Coalition on Aging. 

Senior Living: Of course, not all seniors will be able to stay home even if they want to. Elders generally move into senior living facilities at age 83. In 2029, the oldest of the baby boomer generation will turn 83, at which point the senior living industry can anticipate an influx of demand. 

Senior living investments tend to be recession resilient, according to Haven Senior Investments. According to the National Council of Real Estate Investment Fiduciaries 2018 property index results, the total return for senior housing real estate on a ten-year basis was 10.52 percent. Senior housing outperformed the overall property index of 6.09 percent and apartment total returns of 6.10 percent.

Everyone ages, and the senior population is destined to grow. Senior care will require lots of money, which is an opportunity for the healthcare sector, particularly as healthcare innovations provide more personalized and efficient care.

[/vc_column_text]

Unlock a World of Investing with a Free Magnifi Trading Account

START TRADING FOR FREE

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today. 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]


Children

Unlock a World of Investing with a Free Magnifi Account

START INVESTING TODAY

Baby-tech, parent-tech, fam-tech… call it what you will. The fact of the matter is, most millennials are having children later in life than their parents, and they want more efficient, streamlined ways to care for their kids.

From extending fertility to sleeping easier with a newborn to stimulating and tracking their child’s brain development, modern parents are using technology to do things in a more data-driven way than their parents did.

When it comes to his smart sock, parents and investors alike are buying in. Owlet, founded in 2013, remains a private company with an estimated annual revenue of $31.3M per year. In total, it has received $51.6M in funding.

Consider the case of Owlet Baby Care. The Owlet smart sock is a baby monitor that uses pulse oximetry to measure and track oxygen levels and heart rate, alerting parents via wirelessly connected devices if either reading drops to an unhealthy level. One sock costs $299 before additional accessories. According to Owlet founder Kurt Workman, “Parents spend a lot of money on their children, and will spend more if you can solve problems for them.”

Technology-driven parenting tools are here to stay, presenting lots of opportunity to investors. Here’s what investors should know about the fam-tech industry.

What is Fam-Tech?

Millennials are having fewer children, starting later in life, and their parenting style is driving new technologies. 

Consider that the fertility rate for the US in 2020 was 1.779 births per woman. That’s significantly lower than in 1950 when the fertility rate was nearly double that, at 3.148. 

According to a report by the New York Times, these days, first-time moms are on average 26 years old (up from 21 in 1972) and first-time dads are 31 (up from 27 in 1972). 

Even so, across the US, the age of becoming a mom for the first time is heavily divided primarily by one factor: education. Parents who have spent their time getting an education, building a career, and growing their income have children on average seven years later than those who don’t. These slightly older, well-educated parents are better able to afford everything from preschool to, well, Owlet socks.

Being an older parent isn’t out of the norm these days, and aspiring parents aren’t worried so much about age as their ability to have a baby at some point. Notably, egg freezing increased in 2020 when dating came to a halt. By 2026, the global IVF Market size is expected to reach $36.39 billion

These new-age parents are paying for things that in 1950 during the baby boom, parents likely never imagined. 

Consider, for example, a meal subscription just for babies. Square Baby personalizes a nutrition plan for baby based on their age, dietary restrictions, and preferences, sending nutritious frozen meals every two weeks. For older children, the company Raddish Kids offers a subscription plan focused on helping kids learn to cook in the kitchen. Raddish raised its first dollars ($3,515 above its $15,000 goal) though a successful 2013 Kickstarter campaign. 

Subscription services for kids are a big deal. And there are at least 22 clothing subscription services designed just for kids with parents that either a) don’t have the time or b) the interest to shop for new clothes every season for growing little ones. 

Subscription services are just one example of fam-tech at work. 

With parents so busy working, who has time to write out a baby book? Yet again, there’s an app for that. Queepsake captures moments and milestones via photos and messages on a smartphone, populating them into a book. 

Need help with bedtime for your little ones? The Hatch night light and connected app allows parents to adjust the sound from down the hall using a connected app.  The Hatch has a programmable “okay to wake” setting for young kids to help parents get a few more ZZZs. 

For older children, fam-tech has solutions for monitoring online activity, with parental controls over content and remote access to children’s online devices.

Why Invest in Fam-Tech?

Fam-tech has a huge market opportunity, with millennials looking to technology to help solve challenges associated with parenting in the modern world. 

For example, right now, a lot of families have a big problem. With more than a billion students suddenly unable to physically go to school in 2020 because of the pandemic, e-Learning became the unanticipated format of education in 2020. That means that these days, lots of parents are working alongside their kids who are schooling from home, leaving 65 percent of working parents feeling completely burnt out. 

When kids aren’t schooling and parents are playing catch-up, kids are left with more screen time than ever. That leaves parents trying to figure out which tools, apps, and tech they can direct their kids towards to help their learning and development move ahead, rather than regress. 

If 2020 has left a legacy, it’s rife with opportunities for new fam-tech solutions. And, according to the early-stage venture capital firm Initialized, we’re going to get them. From ways to get more sleep, to delaying parenting, to sourcing childcare, to tracking development, to monitoring e-learning, and more.

[/vc_column_text]

Unlock a World of Investing with a Free Magnifi Account

START INVESTING TODAY

Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Try it for yourself today. 

This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide broker-dealer, custodian, investment advice or related investment services.]