The textbooks say when we buy equities we should be buying for the long-term – but how long is long-term? To give you a frame of reference you might be interested to learn that in the US last year, stocks were held on average for 22 seconds due to high frequency trading. I suppose in the world of microseconds 22 seconds is quite a long investment.
Resource companies are pouring billions of dollars into new mines and infrastructure and this is causing concern amongst some investors given the perilous state of the global economy. However, looking at the rate at which emerging economies are urbanizing I don’t think they need to worry. The numbers tell the story – in China, for example 51.27% or around 690 million people now live in urban areas and this is expected to grow to one billion people by 2030. No crystal ball needed here.
Western countries are trying revitalize their post-industrial economies by transforming themselves into ‘smart’ economies based on high-tech and services. However according to the US National Science Foundation, 85% of the growth in R&D workers employed by US multinationals has been abroad, particularly in Asia and that made me skeptical whether the smart economy goal can be achieved.