Inflation, Transformation Processes and Economic Challenges

Good Morning Ladies and Gentlemen

“The stock market is a device for transferring money from the impatient to the patient”
by Warren Buffett

Inflationary trends

Inflationary trends are usually never just a monetary problem but an expression of long-term structural transformation processes. US central banker John Williams, head of the New York Fed, believes the Fed has made considerable progress in lowering inflation in the US. However, the uncertain outlook means that the central bank must monitor incoming data to determine its interest rate policy. I believe over the next ten years, we will see immense demand for investments in some very particular areas:

Investing in tangible assets

Well, Ladies and Gentlemen, this is nothing new to my “older” readers, of course. I still firmly believe in investing in tangible assets as they remain the best protection against inflationary trends. So, quite frankly, I remain optimistic about investing in equities in the long term. The question remains: What sectors should you invest in? Where can we find value?

Pharmaceutical, Biocare and more

Everything relating to longer and healthier lives will be essential, i.e., areas of biotechnology, life science, medicine, and pharmacy. I believe safety and security will also boom, from cyber security to security of supply with, for example, new storage technologies. Another major topic will most probably remain the data economy and digitalization, with artificial intelligence in, for example, so-called “clean” energy and mobility.

Challenges to the “old economy”

Therefore, ongoing changes seem imminent. They will continue challenging almost all “old” business models and simultaneously help many new ideas break through.

Very long trends

Trends are usually lasting deceades. When looking back over the last 200 years, we can see decade-long trends for sectors like finance and real estate, transportation, energy, natural resources and materials, information technology and communication and maybe soon enough, biotechnology, life science, medicine, and pharmacy. Looking at current demographic trends and at valuations, I would not be surprised to see such a shift.

Ladies and Gentlemen

As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li

Many thanks, indeed!

I wish you an excellent start to the day and the weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li