For investors, it may feel like the last two years were an entire decade unto themselves. Between the COVID-19 pandemic and the war in Ukraine, markets have been rattled by world events in ways not seen in more than a decade. We’re seeing markets move faster than ever before – major indices dropping 30% in six weeks, commodity prices swinging like wild penny stocks, and entire stock markets being shut down due to unprecedented economic sanctions. Active investors now must pay heed to current and world events if they want to be successful in short timeframes. Here are a few trends to keep an eye on for the rest of 2022.

Artificial Intelligence

Apprehension about AI is understandable, and not just because the Terminator and Matrix franchises presented dystopian machined-controlled universes. The real concern behind AI is increased automation and the redundancy it may cause in a large portion of the workforce. But AI isn’t just robots – it’s machine learning, natural language processing, and prediction analysis.

Artificial intelligence research has always meant to supplement human intelligence, not usurp it. AI advances could outsource a number of menial tasks in order to make human counterparts less burdened. For example, the banking sector utilizes AI to better manage investment risk and scale their communication outreach services. Automotive companies use AI to map systems for their self-driving car applications. And healthcare providers use AI to increase the accuracy of diagnosis and predict ranges of outcomes.

Cybersecurity

Data breaches are inevitable, but the rise in computer-related financial crimes is difficult to ignore. Both large firms and individual consumers are finding it harder to keep their personal information out of the hands of ill-intentioned internet users. Cybersecurity tech has already been at the forefront of our investing radar thanks to the amount of things that went completely online during the pandemic. But cybersecurity will continue to become a popular and pertinent trend as technology advances and we become more dependent on online transactions and communication.

Metaverse and Virtual Worlds

Ready Player One may have only been a movie (and book first!), but the concept may not be as futuristic as you think. Like or not, video games have always been on the cutting edge of digital trends and now they’ve become linked to cryptocurrencies and the blockchain through the Metaverse.

What’s the Metaverse? It’s a nebulous concept, but the main idea is a virtual world where users can interact, play games, and even earn money or prizes. Video games like Fortnite and Minecraft pioneered these concepts, but now games like Axie Infinity and Ultra allow players to create virtual avatars to earn digital tokens which can be exchanged for real money. Or you can even buy land in virtual worlds like Decentraland and The Sandbox. The Metaverse roared into the public consciousness last year and shows no signs of slowing down in 2022, despite a major bear market in cryptocurrencies.

Decentralized Finance

Another advancement in the cryptocurrency space is Defi, or decentralized finance. Presented as an alternative to traditional finance (TraFi), decentralized finance bypasses major institutions like banks and brokerage houses to provide financial services to customers. DeFi can be used for lending, borrowing, banking, or a number of different activities that usually require a central clearing house like a bank.

Cryptocurrencies have only been around for 12 years and DeFi applications are even younger, so the space is still unregulated, unmonitored, and unfit to those who don’t understand the risks involved. DeFi is a way to get around strict bank rules, clunky transaction processes, and excessive fees, but it’s also riddled with unscrupulous participants and some outright scammers. However, despite its infancy, DeFi is on the radar of every major banking institution and many scammers will be forced out as technology advances and regulation buckles down.

Electric Vehicles

Driverless cars might still be a ways off, but electric vehicles are here now and poised to dominate the automotive industry as tech and infrastructure expand. The prospects of efficient electric vehicles have enabled Elon Musk to become the world’s richest man on paper, but Tesla is far from the only car manufacturer working to produce fleets of EVs. Ford, Chevy, Hyundai, Toyota, BMW, and Mercedes-Benz all have electric models available to the public.

The tailwinds for electric vehicles have never been higher. Oil shocks due to the Ukraine war have sent gas prices higher than they’ve been in over a decade. An increased focus on climate change and environmental stewardship will push both regulators and consumers toward more EV adoption. If you’re reading this, there’s a good chance you’ll be considering some model of electric vehicle for your next car purchase, a concept that would likely be unfathomable to most shoppers a decade ago.

Work With an Experienced Financial Advisor

Our knowledgeable financial advisors at Good Life Financial Advisors of Mt. Pleasant are here to help you plan your investments. Contact us today to speak to our consultants and learn more about the tools and guidance we offer.

Disclosures

The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual.