What will shape the next 25 years for investors? |
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This week’s insights include: |
- What shaped the last 25 years of markets: China’s economic boom, the rise of big tech, and an era of ultra-low interest rates helped define global markets from 2000-2025.
- Five forces shaping the next 25 years: From AI-driven automation and the electrification of the global economy to demographic shifts, deglobalization, and rising debt, several powerful structural trends are set to reshape economies and investment opportunities.
- The portfolio takeaway: As these transitions unfold, returns across markets may become more uneven. That makes it increasingly important for investors to identify the companies positioned to benefit from long-term structural shifts.
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This week's Market Insights article is a 5 minute read! |
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The first 25 years of this century were shaped by a few major themes. China’s economy expanded fifteenfold, tech companies dominated the market, while debt levels surged and interest rates fell to near zero. Over this period, the S&P 500 delivered an average annual return of 7.6%, noticeably lower than the 16.9% average from 1975 to 1999, though that figure masks a more uneven journey that included a “lost decade” followed by above-average returns between 2010 and 2025. Looking ahead to 2050, several powerful secular trends are likely to shape economies and markets. We highlight five of them... four major transitions and one structural headwind. |
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| "It is the macro themes that stick around for decades that arguably matter the most." |
~ Eric Lascelles, Chief Economist, RBC Global |
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Here’s a quick summary of what’s been going on: |
- Oil shock complicates rate-cut plans for central banks.
- AI revenue race tightens as OpenAI and Anthropic scale enterprise adoption.
- BYD’s rapid European expansion prssures EV rivals.
- Poland considers selling gold reserves to finance defence spending.
- Broadcom signals $100B AI chip opportunity as custom silicon gains momentum.
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The next 25 years for markets |
There’s a lot going on right now. As yet another war spreads across the Middle East, AI is upending the software industry. At times like this, it’s a good idea to take a step back to gain some perspective. We are also at Year 1 of the next 25 years into the century. So, what better time to take a super long view, and think about what the next 25 years could mean for investors? Here are three of the five themes we expect to shape the next quarter of the century: |
- AI & Automation: Rapid improvements in AI models and falling inference costs are making the automation of knowledge work increasingly feasible. At the same time, technologies like robotaxis, drones, and humanoid robots could gradually extend automation into the physical world. Massive infrastructure investment is laying the foundation for a new generation of AI-powered products and services.
- Electrification: The global economy is steadily electrifying as renewable energy, battery storage, and nuclear technologies advance. At the same time, rising electricity demand from AI infrastructure and data centers is accelerating the need to expand power grids. Regardless of the energy mix in the next 20-30 years, the companies building and supplying energy infrastructure could be key beneficiaries.
- Changing demographics: Many developed economies and China are facing aging populations and shrinking workforces, creating long-term growth challenges. Meanwhile, younger populations in regions like India, Southeast Asia, and Africa could drive the next wave of global consumption. This demographic divide may reshape where economic growth (and investment opportunities) emerge over the coming decades.
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Join the discussion by leaving a comment! |
We’ve shared three contrarian ideas, but what would you add to the list? |
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Tuesday 🇯🇵 Japan GDP YoY (2nd/Revised Estimate) Forecast: 0.2%, Previous: -2.3%
Why it matters: Any upward revision supports BoJ rate hike expectations. |
Wednesday 🇯🇵 US CPI YoY Forecast: 2.4%, Previous: 2.4%
Why it matters: A surprise to the upside could stall Fed rate cut expectations amid tariff fears. |
Friday UK Monthly GDP MoM Forecast: 0.1%, Previous: 0.1%
Why it matters: A miss would intensify calls for faster BoE rate cuts, which will need to be weighed against rising energy prices. |
Most of the large caps have reported, but lots of smaller companies including retailers and software companies will be reporting over the next few weeks: |
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