DOES THE UK TECH SECTOR DESERVE YOUR INVESTMENT ATTENTION

The idea of investing money can be extremely tempting. Not only is the concept of being able to read markets, understanding potential and predict success alluring, but being able to make significant financial gains on the back of shrewd decision-making can be life-changing.

With that in mind, acknowledging trends, and being aware of where best to invest one’s money is imperative. However, with the investment scene becoming increasingly competitive, it can be difficult to keep track of the industries and sectors that deserve your attention.

 

The UK tech scene
If there is one area that has made huge strides in the last 12 months, it’s the UK tech sector. In the 12 months ending December 2017, the sector managed to accrue a staggering £3bn in venture capital funding. This record investment sum is perhaps even more impressive given the widespread ambiguity regarding Brexit and its potential consequences.

In 2016, the UK tech sector saw investment in the region of £1.63bn, which at the time was deemed a successful year. However, the 2017 boom meant that UK tech firms attracted almost four times more funding than was seen in Germany, while investment was more than was garnered by French, Irish and Swedish tech companies combined.

London-centric
According to official figures, around 80% of said tech funding went to companies based in London. The results led to London Mayor Sadiq Khan stating that he is committed to ensuring ‘London overtakes Silicon Valley as the world’s leading tech hub’.

 

The fintech growth
Fintech has been an overwhelmingly popular investment choice over the last 12 months or so. Organisations such as Monzo, Funding Circle and Transferwise managed to bolster the UK’s investment portfolio. A record £1.34bn was invested in such firms – almost as much as was invested in the total UK tech arena in 2016.

 

Guidance
When it comes to finding the right investment choices for you, it makes sense to get guidance and assistance from people that understand developments, trends, and future growth. If you want to know more, get in touch with us today. Together, we can make your financial future brighter.

4 2018 INVESTMENT IDEAS

With a new year comes a new opportunity to make investments, but how will 2018 shape up? There are a phalanx of factors which investors – whether first time or experienced – need to take into account this year, but here are some investment ideas which are based on sound logic and a healthy dose of opportunism.

 

1. Gold

Many are expecting the US Fed’s rate hike cycle to mean that the dollar will perform well in 2018, but also keep your eye out for the bullion, which could see some heartening performance levels if an unexpected political event or events take place this year. Gold is a great long-term investment option to take as part of a diversified portfolio, and experts believe that holding a 20 per cent share of your entire investment pot in gold can be a good ratio to aim for.

2. The debt market

In a year when inflation could be lower than we have seen previously, the debt market could be worth looking at for a sector which is ripe for investment. That’s because there looks to be a probability of capital gain this year, and although factors such as crude oil prices can have a say, the debt market looks like a good place to be for 2018 investors who wish to plant their feet for a two to three-year duration.

 

3. Bonds to diversify risk of equity

There are certainly rewards for investors who wish to take risks in 2018. Portfolios which are considered to be taking moderate or aggressive risk can balance them out by using investment options such as bonds to diversify the risk.

4. Shares

When looking at the kind of shares to buy, it might be a good idea to pay close attention to the effects of Brexit. Some companies listed on the UK stock market will have the possible advantage of generating a large share of their income outside the UK, meaning they will be less prone to suffer as a result of the UK’s imminent withdrawal from the European Union.

 

We hope you enjoyed these four investment ideas for 2018. Have a prosperous year!

HOW TO USE P/E RATIOS EFFECTIVELY

Price to earnings ratios are widely quoted, and still a major staple of smart investment and trading. Though many stock investors just starting out understand the concept of P/E ratios, they can be a little fuzzy on how to actually apply it. Here are some ways to compare a company’s P/E ratio, and the judgements you can draw from these comparisons.

 

The market

Starting with the most valuable companies, the P/E ratio can be an excellent guide to the value of the whole market. These ratios are easy to find on various financial websites or journals like the Financial Times. Let’s say you’re looking at a FTSE 100 stock, such as Morrisons Supermarkets. We’ll say the index itself is at a P/E of 14, whereas Morrisons Supermarkets is at a P/E of 10. The simple conclusion to draw is that Morrisons is cheap compared to the rest of the market. While this can be the start of some smart investments, it’s important to remember that the FTSE 100 covers a range of industries with their own economic pressures.

The industry

To get a little more detailed when planning investments, investors should be comparing a company to its competitors and peers. Again, Morrisons with its P/E of 10 would look fairly cheap, trading to a “discount” in the retail niche. Is this company-specific, or affecting other retail firms? It’s also worth probing a little more to figure out why the whole retail industry is trading at a discount. If analysts have deemed certain prices or trade deals unsustainable, the retail sector could have a slump on the horizon. If, however, you believe that these prices and arrangements will stay steady, the retail industry could be offering great value.

 

The company

Another way of determining whether or not you’re getting a stock at a good price is researching how the market has valued it historically. Many financial sites offer P/E ratios stretching back years, which, once they’ve been averaged, can make a handy benchmark for investors on the fence. For example, if a certain stock is trading beneath its 5-year average P/E ratio, this is a clear indication the market is placing a lower value on it than it has previously.

5 INVESTMENT TRENDS TO LOOK OUT FOR IN 2018

From the instability of bitcoin to emerging markets, let’s take a look at the top five forecasted investment trends to look out for in 2018.

 

Emerging markets

There may be significant opportunities in the Bric countries (Russia, Brazil, China and India) for adventurous investors. Declining inflation in the Bric countries could drive some advantageous economic policies, providing a reason for economists to predict strong growth.

 

AI and hybrid advisors

Last year we saw a significant rise in the use of “robo-advice”, where computer algorithms choose and manage investors’ portfolios. However, 2018 will be the year where investment managers combine both robot and real-life, taking a more hybrid approach. Research suggests that this hybrid model methodology is preferred by investors.

Investors will benefit from lower fees, as increasingly intelligent AI systems manage day-to-day transactions. The “human touch”, however, will come more into focus; markets can be outperformed by human experts and because real-world interaction helps investors choose the right blend of investments that meet their goals.

 

Bitcoin & Cryptocurrencies

It is unclear as to whether bitcoin will continue soaring in value or tank. According to Mike Novogratz, cryptocurrency expert and former Fortress Investment hedge fund manager, it could be the former.

However, many point to proposals to split the cryptocurrency again, which may lead to great volatility in value.

The founding of Bitcoin derivatives and futures is also a potential cause for concern, opening up Bitcoin to “Shot Sellers”, this allows investors to bet against its value increasing.

Fintech: Improving the investment experience

Fintech’s exponential speed of change will inevitably change the way we invest. From improved biometric security to increasingly sophisticated chatbots that can handle your queries and process forms straight from your smartphone camera. 2018 is set to create new, easier and efficient ways to manage your investments.

 

Alt.Assets

Interest in private equity, commodities, infrastructure and real estate is anticipated to increase in 2018. According to PWC, new figures suggest that the number of funds under management for the above assets is set to increase, rising to $13.9 trillion in 2020 from $10.1 trillion in 2016.

 

Remember, past performance does not determine future performance, and the value of your investments can go down as easily as they can go up with the potential to lose your money always rearing its head. If you’re unsure how to make the most out of your investments, we offer tailored investment solutions via a personable and attentive service to ensure your clients get the best solution for their investment needs.

INVESTMENTS TO KEEP AN EYE ON

Investment pundits on MoneyWeek have identified a variety of investment ideas for this year, based on their experience of covering the financial markets. Some investments to consider for the year include:

 

Platinum

Platinum prices are nowhere near the price of gold and average around $975 per ounce. This gives the precious metal a valuation at production cost, or slightly below this. Dominic Frisby recommends buying platinum as he feels a fair value price for the metal should be around $1,650 per ounce.

 

Whitbread

Phil Oakley identifies Whitbread as a potential share to buy for 2018. Its Costa Coffee and Premier Inn brands both appear undervalued by consumers, and he suggests the share price should be closer to £50 than its current price of £40. Costa Coffee is currently diversifying away from the High Street and into the retail park and business park drive-through outlets, while their Costa Express coffee machines have proved extremely profitable for the business. Premier Inn offers a lot of scope for extending current hotels and building new ones and is a popular choice for business and leisure consumers. The company has started to build business in Germany and owns most hotels outright, so has an extensive property ownership portfolio.

Japan funds

Merryn Somerset Webb suggests that investing in the Baillie Gifford Japan Trust is likely to produce dividends in 2018. The fund is growth-oriented and has a good performance record, while Japan’s Topix stock market has experienced a recent bull run that has pushed prices up by 19% in 2017. Japan is politically stable and leads in a number of critical technologies.

Biotechnology companies

Dr Mike Tubbs recommends biotechnology investments as critical to investors in the 21st century. He suggests avoiding smaller biotechs as they may not possess sufficient finance to ensure growth, however, mid-size companies such as Vertex Pharmaceuticals which trades on the Nasdaq may be stocks to watch this year. Vertex Pharmaceuticals has a monopoly position on drugs to treat cystic fibrosis, giving total 2016 sales amounting to $1.7 billion. Several new combination drugs are currently proposed and have had promising results in clinical trials.

INVESTING IN GREEN TECH

Investments in smart technology, robotics and clean infrastructure are gaining momentum as the rise of these disruptive sectors drive change. The growth of electronic vehicles manufactured in China, legal challenges to manufacturers of diesel cars that generate dirty air, and significant developments in technology have given investors more ways to invest than available previously.

But the questions on investors’ minds are, can we really profit from clean energy? And is it simply a fad, a vogue values-based investment, or a genuine long-term investment?

Firstly, it’s important to look at the goals of green technologies:

 

Types of green tech

Sustainability: This is the endeavour to meet the needs of society via methods that can be utilised continuously and indefinitely without the plunder of natural resources.

Source reduction: By changing consumption patterns and production methods, the goal of source reduction is to significantly reduce waste and pollution.

Cradle-to-cradle design: This hopes to end the days of the cradle-to-grave cycle and manufacture products that can be reclaimed or reused.

Innovation: This is the search for new technologies that can replace those currently harmful to the environment.

Viability: This factors in both the economic and societal likelihood of adoption, and the increase of speed at which such product concepts and technology in question can be implemented.

Green tech investment strategy

When deciding on a green technology sector to invest in, it’s important to search for not only the most profitable of opportunities but the one that aligns with your environmental, ethical and personal interests. As with any type of investment, there are risks associated when investing in new technologies. That’s why diversification is key to a successful investment approach. Investing in several green sectors helps you protect your funds and diversify your portfolio.

The challenges of green tech investing are in two parts, to a: increase one’s wealth and b: make the world a better place via responsible investing. Taking the time to thoroughly research your potential investments prior to investing will prove invaluable in protecting your personal wealth and making sure your funds go to green tech that has a chance of making a real difference.

 

The summary

With demand for green tech increasing all the time, those looking for financially sound and environmentally responsible investments won’t have to look hard to find opportunities in abundance.

3 INVESTMENT OPPORTUNITIES ANYONE CAN TAKE ADVANTAGE OF

If you have some money you are thinking of investing, then it can be a tricky decision. There is not only exactly what you will invest it in to consider, but also if you have enough to start with. Some investment markets can require substantial amounts of cash initially to enter and hopefully make money with. Naturally, this can be a barrier to some people who may only have a relatively small sum to invest.

Luckily, the three opportunities below are open to you, whether you have a small or big starting sum:

 

1. Commodities

When people think of investing in the financial markets, one that may not always spring to mind straight away is the commodities sector. This is actually a great one to start with though as it can be done with smaller amounts of money and still see good returns each year, depending on the price movement. The classic commodities are the precious metals like Gold or Silver but there are other areas such as grain or meat. The other fabulous thing about commodities is that they can be easier to predict in terms of future price movements than other markets like Foreign Exchange.

 

2. Cryptocurrency

Few people on the planet can have escaped the buzz around the new forms of digital money, known as cryptocurrency. While the prices can be very changeable, they still represent a fine investment opportunity without the need for a massive cash injection to get started. It is vital to educate yourself before you trade though so you know which cryptocurrencies to invest in. While Bitcoin has made all the news, others such as Litecoin or Ethereum also warrant a further look.

 

3. Peer-to-peer lending

A recent new investment trend is that of peer-to-peer lending. This involves you providing a cash injection into a business you select and getting an interest rate percentage on the return. The beauty with this is that you get a better rate than a traditional savings account and the risk is low if you invest in businesses that are a success. Take the time to do your homework and this can be a steady earner for you.

In the world of investments, you need to protect whatever sum of money you invest. If you need expert yet personal help in this area, then get in touch with us today.

WHY INVESTING IN ARTIFICIAL INTELLIGENCE COULD BE FOR YOU

For many, artificial intelligence (AI) is still something very much in the world of science fiction; the robots of movies such as Star Wars or Blade Runner comes to mind. However, as the world of technology picks up speed at an increasingly alarming rate, the world of AI is advancing before our eyes. Indeed, AI is one of the most exciting technology transformations of this decade, and is something investors may want to start thinking seriously about right now.

While it is true that AI may not feel like a tangible reality for many, breakthroughs are coming thick and fast every day, the market is predicted to approach $60 billion within the next decade. The following reasons are just the tip of the iceberg that may help make your mind up about whether to invest in this technology.

1. AI is already becoming a common household technology

It is easy to forget that AI is present in many people’s home in the form of technologies such as Amazon’s Alexa. While this technology is sure to appear fairly primitive in a few years time when AI has developed, investing now while the market is in its nascent stages may be a smart move.

Indeed, at present Alexa can do some pretty impressive things such as turn off lights, play certain songs and movies, and order Ubers all through the power of voice control. As the Internet of Things becomes ever more ubiquitous, the capabilities of technologies such as Alexa are likely to develop quickly, making it a more and more compelling product for consumers.

2. AI is commonly used in technology companies right now

Technology companies are using AI in ways that many of us are not even aware of. For example, Google, which has set its sights on becoming a major AI player, uses a special kind of machine learning that collates data every time you tap in a question to its search engine. In this way, many of us are using AI technology every day without even realising it.

Although AI may seem like a risky or abstract investment to many, it is actually a thoroughly mainstream developing technology within the industry and is likely to provide a solid investment for those willing to stay in it for the long haul.

NISSAN DEVELOPS NEW MANUFACTURING PROCESS FOR HIGH DENSITY BATTERY PRODUCTION

Nissan and a range of partner companies have achieved the development of an innovative manufacturing milestone at the Sunderland location that produces high-tech 40kWh batteries for electric vehicles and stationary systems of energy storage.

 

A WINNING MENTALITY

The project was called the High Energy Density Battery (HEDB) project, and was a winner in a competition from 2015. The HEDB project was led by Nissan, and won a grant of £9.5 million. It was completed in February, and is now working on producing these new battery cells for UK and EU markets.

Battery manufacturer Hyperdrive Innovation is the partner, set to apply the high-density cells for electric vehicles and stationary storage. There have been new designs for modular systems of energy storage, and a pilot line for building prototypes and assembling packs at HI’s own plant. This all shows movements in the United Kingdom towards furthering innovation in the field of battery technology, which logic would state is a key area for massive growth as the drive towards renewable energy and protecting the environment becomes an increasingly important political and social presence.

WAVE OF THE FUTURE

Applications for new battery storage technologies have great value for use in construction machinery, municipal vehicles, ground fleets in airports and new autonomous vehicles, all of which are inevitabilities for the future.

The progress being made in battery storage innovation by Nissan and its partners shows real potential for investments. After winning such a huge grant, and producing such pioneering technology with the funds, the industry in the UK will be looking to build upon its success. With the HEDB project, there is proof of the capability of these companies to achieve great results when backed by adequate funding, so the calls for investments from the finance sector and beyond are sure to come.

 

LIMITLESS POTENTIAL

This is looking like a strong candidate for significant growth in the long term, and as such is a good option to consider adding to your investment portfolio. With electric cars and other devices that require ever-greater battery storage solutions rising in prominence, this is an industry that is set to become increasingly mainstream and grow considerably as time goes by.

 

2018 INVESTMENTS IN RENEWABLE ENERGY

Renewable energies have yet to overtake fossil fuels as the most profitable energy investment. However, global energy institutions are gradually turning to renewables for the future. Companies are faced with the inevitable fact that fossil fuels are a finite resource. Increasingly, solar, wind, tidal, hydro and biofuel energy sources are becoming the focus of industry and government attention.

By 2020 the European Union plans for 15% of energy to be renewably sourced. The UK is committed to reducing their carbon footprint by 80% by 2050. Because of this, investing early in renewable energies rather than crude oil and gas appears to be a smart move.

This emerging industry is developing innovative energy methods which could dominate the market when investment in fossil fuels is no longer economically viable, either due to depletions or political interference in the market.

There are a number of different nations ready to invest in renewable energy. The European Union are fast becoming the leading manufacturers of wind turbine technologies. The United States ranks high as manufacturers of solar panels and equipment. The United Kingdom is also establishing strong links between government and renewable energy companies. There are also various listed funds that focus on renewable energies available.

Another option would be to take advantage of the Chinese government’s commitment of $360 billion of investment into renewable energies by 2020. Buying into an equity fund based in Asia Pacific or China would be a viable, albeit indirect method of adding renewable investments to your portfolio.

Mini-bonds and issue bonds have been issued by some renewable energy companies which are worth focusing investments in. Retail bonds are market listed and regulated whereas mini-bonds are not. Another regulated option is debentures which can be used to fund individual projects. This is a useful tool if you are focused on one particular form of energy such as solar.

Whichever renewable energy you wish to invest in it is important to be aware of the potential risks. Renewables are the future and have government backing but that is no guarantee of returns on investment. Funding them should be done with discretion.

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