• Don’t avoid what you don’t understand

    By February 24, 2020Uncategorized

    Millennials – the people aged 23 to 38 – see the world differently. They do not want to own a car or a house, those cornerstone assets all the Baby Boomers – aged 55 to 75 – aspired to. They want a self-driving Uber to come pick them up; and they stay in a modern, fibre-connected apartment close to whichever area they are working from that month.  They do not want to hold their smartphone in their hand and type on it, they want to talk to it. They want  to have a conversation with Siri on Apple, Alexa on Amazon, or Google Assistant to order them a Starbucks coffee and sourdough salmon bagel for delivery to their front door in twenty minutes while they put on their make-up. They want Illumina to analyse their genes to make sure they will have a healthy baby and to grow themselves a spare heart in a petri dish for when they need a replacement at age 150.

    All these expectations from Millennials are available today. A blind person can get into an autonomous self-driving car which was ordered by voice command on a smartphone, tell the car to go to the nearest KFC and order a Kentucky Rounder and chips with a Coke, and after collection at the self-service kiosk drive back home. The CEO of Standard Bank recently told an executive of WeWork, the provider of co-working spaces in major cities, that the only way he can recruit Millennials is to promise them that they can work from WeWork offices and not from the tall formal Standard Bank office buildings, because they want the hip, informal, interactive working conditions.

    Walmart, the biggest retail store in the USA, were forced to also sell online by the competition from Amazon, the biggest online store. In December 2019 Walmart saw a 35% increase in their online sales and had to convert some of their physical stores into outlets for just picking up online orders. Soon these stores will have no cashiers, so customers can walk in, scan the item on their smartphone and walk out.

    Why are we talking about these new-generation realities? Because we can all be part of this new technological revolution. Most of the older generation are still invested heavily in older-generation companies; such as agriculture, mining, big retailers, oil and gas, life insurance, etc. Nothing wrong with that, as many of these sectors will always be a crucial part of life and they are very stable for retired investors.

    What we do have to consider, however, is putting a small part of our longer-term savings into the future-world companies. That can be done via your international unit trust companies specialising in new technology, such as Sygnia 4th Industrial Revolution and Sygnia FAANG Plus; as well as in direct equity. One of the main problems with investing in these companies or unit trusts offshore is that the rand is very volatile and sometimes just too oversold. JWR has addressed this problem by collaborating with Investec where we can open a cash account for you. You deposit rands into this account and as soon as the rand strengthens, we convert the rands into dollars and invest in an offshore unit trust or direct equity portfolio.