For well over a decade, the world has jumped from unprecedented scenario to unprecedented scenario, throwing up new challenges for investors. After decades of high interest rates in the 1970s and 1980s, we’ve enjoyed both low inflation and low interest rates. Today, the signs are that we’re heading back to a period of high rates, one that many adults today will never have experienced before.
At the same time, advances in technology are changing the way many people work, undertake simple everyday tasks, and entertain themselves. These developments are also taking away established jobs and creating new ones.
Chronic shortages in housing, the rapid advancement of blockchain technologies, and a changing climate are all coming together to create a unique challenge for investors.
So, in 2022, with this backdrop, which industries might be attractive for investors?
Gaming
Gaming was once the domain of a sizable minority, mostly men and people under 30. But over the last decade and a half, things have changed quite dramatically. It started with the Nintendo Wii and DS, which helped to pioneer new genres of video games and turned the playing experience into a social one.
Smartphones then picked up the gauntlet and helped to create casual and hyper-casual games, as well as giving millions more people access to the medium.
These developments have helped to increase the size of the gaming market, pushing it to become worth around $173 billion as of 2021. According to some estimates, this could grow to $314.40 billion by 2027, a compound annual growth rate (CAGR) of 9.64%.
This will be helped by even more people taking up gaming as a hobby, the growing influence of esports, and the continued expansion of microtransactions. As the internet reaches even more of the world, gaming companies will benefit greatly as their number of potential customers grows with it.
On top of that, the iGaming space will continue to build. It will do this in two main ways; the first will involve continued innovation, with online casinos creating exclusive titles and new types of games for their players. We’ve seen this a lot in recent years, with live dealer games, progressive slots, and unique titles like Wild Wild Bass and Big Blue Bounty.
The second way will be further expansion into new markets, especially the United States, where iGaming is a relatively untapped sector.
Electric Vehicles
Electric vehicles are widely considered to be the future of the automotive industry. They are, of course, not a panacea but they do help to address many of the problems that exist within transport.
Governments around the world have announced that they will be banning the sale of new cars that rely on conventional combustion engines. The exact rules and timescales vary from country to country but, in the UK, this will mean traditional petrol and diesel cars will be withdrawn from sale by 2030 and hybrids will be removed from forecourts by 2035.
With this in mind, manufacturers of electric vehicles have become incredibly attractive to investors in recent years. The most famous of these is Tesla, a company that’s seen its share price rise from less than $90 in January 2020 to $1,222 in November 2021, though it has since dropped to $809.
Tesla is not alone, Rivian is another electric-only company that has been the darling of investors in recent years. Traditional manufacturers like General Motors have also fared well, with the company trading 24% higher in early 2022 than it had done for much of the last five years.
Of course, there’s a chance that investors may have missed the boat for the big gains and talks of a bubble have been circling for years, but these companies may still be attractive to those looking at the long term.
Ultimately, we will all still need to find ways to get around, and whether we drive them ourselves, ride them as part of public transport, or make the leap to fully-autonomous vehicles, we will still need vehicles. Therefore, electric vehicles are going to be a big part of the future, one way or another.
