We’re not the first to say it: 2016 will be remembered as a year of upheaval. The chaos – good and bad – unleashed by the EU referendum and the US presidential election had many speculators scratching their heads, and many more weeping into their handkerchiefs. But, regardless of which camp you fall into, one thing is universal – the year has left a great deal of uncertainty in its wake especially when it comes to investing.
While variables such as international relations, oil prices and the global economy make predicting the future a mug’s game, reasons remain for investors to be cheerful. From chaos comes opportunity, and the natural ebb and flow of economies makes betting on outcomes a potentially more lucrative venture for those who guess right. More to the point, while many expect the fallout from 2016 to have a negative impact on 2017, others are not so sure.
Perhaps this is another example of hope springs eternal, but even a neutral analysis of the future throws up reason to be optimistic.
1. Building is back on the agenda
In his Autumn Statement in November, Chancellor Philip Hammond announced a bundle of money to support housing projects, comprising a £2.3bn housing infrastructure fund and £1.4bn for the construction of affordable homes.
Given how hard house builders were hit in the Brexit aftermath, this could go some way to brightening the picture, opening up not only more jobs and accommodation, but ample opportunity for investment.
2. Productive investing
In the same statement, Mr Hammond promised to tackle the UK’s post-Brexit productivity problem by announcing a £23bn productivity investment fund, which will be doled out over the next five years.
Details remain thin on the ground, but watch carefully for sectors set to benefit from the new cash.
3. Technology may be about to explode
Technological innovation has been speeding up for decades, but in 2016 it stepped up a gear. Virtual and augmented reality saw widespread consumer adoption, the Internet of Things and big data converged, and artificial intelligence and machine learning advanced by leaps and bounds, with the AI systems market expected to grow from $358m in 2016 to more than $31bn by 2025.
The takeaway? That the tech industry is huge, growing and potentially ripe for investment – just don’t go in thinking every company is a guaranteed winner.
4. Startups are confident whatever the weather
The hottest UK sectors may show little sign of cooling, with some good ideas attracting finance regardless of prevailing economic winds. It’s something we saw at SyndicateRoom after the Brexit vote: the waters may be choppy, but backers of well-intentioned startups are staying the course. Not altogether too surprising, perhaps; early-stage investors are used to a hefty dose of risk.
In terms of sector, medtech continues to rocket, perhaps in part a manifestation of investors’ desire to help Britain lick its wounds following months of civil bickering.
Thank you to our guest bloggers, SyndicateRoom.
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