2 Big Reasons The Investing Playbook Is Outdated

Back in 1909, when radio was still in its infancy and steam ships were big news, the U.S. replaced Britain to become the economic leader of the century. The world’s financial headquarters were officially in New York, not London.

Globalization shifts power to the east

However, in the 21stCentury, especially during and after the Great Recession, we have experienced a shift in world economic power from west to east. The U.S. and Europe have clearly seen economic trouble and the center of power has moved further east to make cities like Beijing and Shanghai new global economic hubs.

The growth of technology and the acceleration of globalization has resulted in greater interconnection of global markets through a boost in communication and better awareness of the opportunities present in different corners of the globe.

This has led to both opportunities and challenges as division of labor enhances efficiency but competition grows. With access to global markets, everyday investors can tap into larger and more diverse markets. Using an unprecedented wealth of information, investors can effectively assess investments across a multinational portfolio.

Climate change matters to consumers

Climate change has also had an effect on how investors prepare for the future, calling on all companies to be more active in preserving the environment. Whether voluntarily or not, many companies have heard and responded to the call.

While climate change continues to make headlines across the world, a keen observer may notice that it has very little (if any) coverage in traditional investment books. The modern investor must take climate change into account when making investment decisions.

The Principles for Responsible Investment (PRI) released a guide to help investors reduce emissions in their portfolios. The paper, titled Developing an Asset Owner Climate Change Strategy, states thats, “Response to climate change must be tailored to an asset owner’s investment approach and asset class mix. This could involve: Measuring a portfolio carbon footprint; engaging with policy makers and companies on transitioning to a low carbon economy; and accelerating newer forms of investment.”

Where’s the good news for the modern investor?

When investing in the 21stCentury, there are two main things to keep in mind. One is that the investing playbook is very outdated because of the dramatic shift in financial power towards the east. If you’ve never looked into Asian stocks before today — now’s your big chance. Savvy investors can still seize opportunities that accompany global change and stride the wave of growth.

The energy market is also completely transforming, and the word “clean” has a lot to do with it. Where once we spent all our time and money on oil investments, everyone is now moving their money to alternative fuels that preserve and protect the environment. For the 21stcentury investor to succeed, they have to recognize the changing times, commodities, and technologies that surround them.

The second thing to keep in mind is that diversification remains the smartest way to go. If the financial crisis taught investors anything, it’s that keeping all your eggs in one basket is a terrible idea unless you’re prescient. By diversifying portfolios, investors hedge their bets against uncertain times of growth, and a cushion to protect them as they go through various unanticipated peaks and troughs.

It’s also worth pointing out that add that the days when an investor left everything in the hands of their financial manager are gone. The modern investor has to be proactive in managing their own funds — even if they are going to hand it off to someone else — and know all there is to know about their investments and the risk they carry.

Invest like it’s the 21st century

We’re already almost two decades into the 21st century, but we have to look even further ahead at the potential opportunities and challenges in years to come. We must reflect on past events and the opportunities we’ve already missed. Generally, the future looks very bright. But only if we’re willing to let go of some of our 20thCentury investment habits.

Originally published on troydixon.com


Why Is Golf An Elitist Sport?

Long referred to as “the gentleman’s game,” golf carries with it many upper-class connotations. The stereotypical golfer has too much time on their hands and too much money to care. While not completely true, there is a slight amount of accuracy to the idea that the world of golf is walled-off to many.

The game is almost synonymous with a certain kind of social and economic status. We popularly think of golfers as at least middle class, with plenty of leisure time and the means to afford expensive clubs, tee times, and frivolous accessories. The modern reality is that anyone can pick up the game of golf if given the right opportunity.

One major reason that golf is considered elitist is the perceived lack of diversity among those who play it. Golf history invokes ideas of exclusive country clubs with gates that open only for those with power, influence, and the right skin tone. Although today 20% of players are nonwhite with the proportion growing ever larger, the perception of golf remains that it’s mainly a sport for upper middle class white men.

Another reason for the elitist perception is that even playing on less expensive municipal courses requires access. They’re not places a group of teenagers can walk around the corner to start playing. At the very least they need a ride and borrowed clubs. Additionally, a golf course is a secluded piece of land that needs heavy regular maintenance. Not something you’re likely to find in underserved neighborhoods. This simple fact of the game means that many who lack transit options (most courses are not accessible by public transportation) will not have the opportunity to play.

Although the game itself is not inherently elitist, the fact also remains that golf is a hallmark of the business world, which is still mostly occupied by moneyed white men. We associate golf with the financially successful (or at least comfortable), and the course is a place where deals are made and professional relationships are formed. “A round of golf” is basically shorthand for a casual client meeting. To keep an entire generation of young people out of golf deprives them of a method of entrance into this world.

He may not be the role model he once was, but it’s easy to forget that at one point Tiger Woods carried on his shoulders the dreams of young people of all races. His success at an early age (he is still the youngest-ever winner of the Masters, earning his first green jacket at just 21 years old) was an inspiration for many not just to take up golf, but to strive for success in fields they may not have thought were intended for them.

It’s this sense of hope that The Bridge Golf Foundation nurtures in the young men we help. Through immersion in golf and related activities, we provide access to a world of possibilities both on and off the course. It’s not a matter of giving kids a new game to play. It’s about showing them that the world is full of opportunities to grow and learn in places they might have never considered before.

Originally published on troydixon.org