Let me say right off that this piece isn’t discussing any near-term action in the markets, so if the market takes a dip, it’s well within the context of what I am writing, states TG Watkins of Simpler Trading.
That said, I have been discussing how bullish on the market I am. In it I give a two-year time horizon for the renewed bull run we currently find ourselves in, but what then? Does the market just roll over and die? Does it just give up and fall apart for years after that?
Hardly. I believe there is far too much innovation happening in the world right now for markets to not appreciate over time. Yes, of course, there will be natural pullbacks, corrections of 10%, and temporary bear markets of 20%, but those drawdowns will clear out the brush and clutter to make way for the next round of energetic moves.
Think about some of the economic booms of our past with the industrial revolution, the invention of the automobile, aviation, the computer, the internet, and so on. Each one created a wave of new industries, businesses, and growth.
So, what are the next areas of technological development, which will propel our economy into the future and the markets? What will keep the markets generally rising for the next 10 to 15 years or more?
As far as the internet goes, Covid was the trigger that compressed 10 years of online development into one year, and we are still just getting started. Work from home, shop from home, socialize from home. We are becoming very comfortable doing all things over the internet.
We are seeing rapid development in the drone and unmanned aviation space. With this, I believe we will see drone package delivery and shipping.
Space commercialization has really ramped up and even more, startups are getting into the field.
Electric vehicles are suddenly hot and becoming widely popular. Then think of the massively wide fields of interest surrounding cars. If everything goes EV, even our infrastructure will need to be renovated.
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Venerable energy or at least alternative fuels for energy are becoming a thing as our technology has finally made a big leap possible.
Genomics is also coming into the spotlight. I wonder if part of this was also due to Covid and our collective realization of what is possible in that space.
Don’t forget the resurgence of Bitcoin and cryptos. It seems there has been a long enough incubation period for it to gain acceptance, just in time for the devaluation of the dollar due to a 23% increase in the money supply.
This isn’t an extensive list, but I think you get the picture. There is a lot to look forward to in the future as a driving force for economies and markets. Trade wisely but seek out the industries, which will carry us forward.
TG Watkins is the director of stocks at Simpler Trading.