Originally published at: https://blog.12min.com/where-the-money-is-summary/
How to Spot Key Trends to Make Investment Proﬁts
You have likely come across the term “the butterﬂy effect.”
Who Should Read "Where the Money is"? And Why?The author states that if you gain a comprehension of these trends, you can settle on wise investment decisions now and later in the future.
Although, the author has incorporated a glossary of terms at the end of the book, unlike many books studying the topic of investment and finance, while reading, you do not drown in an ocean of insider, “expert” language.
The author succeeded in writing a readable book that demonstrates how worldwide trends and patterns link to each other.
Additionally, he gives a further simple explanation on how it affects you both personally and professionally. Since local economies are profoundly affected by globalization, we recommend this book to everyone, regardless of your area of interest.
About Dr. Robert J. FroehlichDr. Robert J. Froehlich is a chief investment strategist of Scudder Investments and part of the company’s Global Investment Policy Committee.
He is a regular guest on CNN, CNBC, and Fox News. He publishes his opinions and analyses with, The New York Times, The Wall Street Journal and Barron’s.
"Where the Money Is Summary"It is a hypothesis that argues that the small swing of a butterﬂy's wings in the Amazon could change the breeze direction and flow in South America, could influence the clouds in the Paciﬁc Ocean and could make it snow in Russia.
Namely, seemingly unimportant occasions in a single place can have a significant impact elsewhere. The situation ruling with present securities exchanges have been a product of global patterns that can be explained by the butterﬂy effect.
This shows the current condition of the modern world, characterized by two fundamental statements.
First, the whole world is linked.
Second, something that at first glance may look unimportant can start a chain response that produces unexpected outcomes.
The butterﬂy effect represents global patterns that influence each part of human’s life. Concerning business sectors, the butterﬂy effect implies that every market, wherever it is, is in some way associated.
Globalization has turned past unconnected events into everybody’s issues. What does this mean for the business environment? Well, since business sectors are linked, even a minor occasion, for example, the wavering of Thailand’s currency, sets off a response in the form of a chain of events that spreads all over the globe.
This butterﬂy effect will be responsible for the following ﬁve noteworthy worldwide patterns in the coming decade:
- Economies and markets will globalize.
- A technology revolution will happen.
- Governments will scale down and privatize many government capacities.
- Demographics will influence the market.
- Corporate rebuilding, mergers, and acquisitions will go global.
Another key point to mention is the impact demographic trends have in the global markets and the business sector. In each nation and geographical area, demographic trends directly influence social and financial trends.
Such is the case because demographics affect what number of individuals need to buy specific items, and which products are sought after.
The current global marketplace divides the world into four districts: The U.S., Euroland, Japan and developing markets. The days when the worldwide economy fixated altogether on the United States, the world’s biggest market, and in Japan, the second biggest, are long gone.
In the midst of the worldwide fall of socialism and the ascent of capitalism and privatizations, new markets have developed. The technology revolution, which gives the tools to link all of the global economies and markets in a free ﬂow of timely data, has significantly modified the way worldwide markets function.
The modern economy consists of local economies and markets which are all linked efficiently to each other.
Key Lessons from “Where the Money is”1. The Technology Revolution 2. Government Downsizing 3. Long-Term Trends in a Short-Term World
The Technology RevolutionThe technology boom will have an even more significant effect on our lives compared to the industrial revolution. The focal point of this technology revolution is the Internet, the most exceptional creation in our lifetime since its uses are numerous.
Unlike other assets, the Internet is not limited by shortage - it is an intellectual asset, not a physical one, so you can replicate it and download it infinitely.
As far as its market impact is concerned, the technology revolution is established on society’s expanded capital expense for better PC equipment and programming, which prompts higher productivity and efficiency.
Government DownsizingThe overall global tendency toward cutting back on and privatization of government capacities will have worldwide resonations.
Privatization and government downsizing will profoundly influence markets all over the world.
Privatization implies rivalry, and that consequently means motivation for better administrative services and increased responsibility, productivity, and efﬁciency.
Long-Term Trends in a Short-Term WorldWith such fast changes in the environment, technology, and trends, everybody is living in a transient world. The best investments will be those made in long-haul trends. Specific standards can enable you to invest wisely in long-haul patterns while living in a transitory world.
As you comprehend the worldwide trends and improvements that will drive the world’s business sectors, you will understand that time is the most critical element for the success of these long-term patterns.
Long haul speculators can get back what they lose after some time since they concentrate on long-haul trends and advancements.
On the other hand, short-term investors who primarily react to dread or eagerness, disregarding long haul patterns, rarely find opportunities to get back the cash they have lost.
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“Where the Money is” Quotes[bctt tweet="I believe that as we embark on the next decade the current division between the technology sector and the telecommunications sector will continue to blur and, as they converge, it will become harder and harder to tell one from the other." username="get12min"]
[bctt tweet=“Governments will never, ever, ever deliver efficient services. And the reason is pure economics. They simply do not have the price signals of profit and loss to tell them how to respond from a business perspective.” username=“get12min”]
[bctt tweet=“Your level of savings and investing is greatly influenced by your age characteristics. Even though you may have great self-discipline and motivation to invest when you are younger, it is very difficult because there are other higher priorities, whether it’s raising your family or buying your first home.” username=“get12min”]
[bctt tweet=“China is in the process of constructing the largest wealth creation engine in history.” username=“get12min”]
[bctt tweet=“Today a majority of European countries have already hit the crossroads where there are currently more deaths than births.” username=“get12min”]