My Investing Thesis 💸
My short term and long term strategy to capture the digital transformation of our society
As an investor, I believe the emerging Metaverse is a potential long-term investment opportunity. The Metaverse is the future where physical and virtual spaces are even more interconnected. Imagine a combination of social media + online commerce + gaming, but on steroids. It's interactive and often immersive by using virtual reality. Users can create and customize their digital identities, engage in a variety of activities and experiences, socialise with loved ones, and explore virtual worlds (more on this here)
The Metaverse is the marketing buzzword flavour of the month in late 2022 when this is written, which will inevitably fall out of vogue as new emerging tech ideas take the spotlight. As the Gartner Hype Cycle predicts, technology will continue to converse in ways that manifest a future where physical and virtual spaces are even more interconnected.
Investing in these emerging technologies at the “innovation trigger” can be a successful short/medium-term strategy. Investing in the “Trough of disillusionment” phase can be an excellent long-term strategy.
To build a well-diversified portfolio I consider asset allocation across different investment types, including stocks, index funds, and cryptocurrencies such as Bitcoin. Index funds like the NZX50 Index or S&P500 provide exposure to a wide range of companies across various industries, while individual stocks can provide targeted exposure to companies involved in the development of virtual reality technologies, digital advertising, and online gaming, which could benefit from the growth of the metaverse.
Cryptocurrencies, while volatile, can offer potential growth opportunities for those who believe in the future of decentralized finance and that there are problems with the legacy system that can be solved by blockchain solutions. I consider the potential benefits and risks of adding cryptocurrencies like Bitcoin to a well-diversified portfolio.
Ultimately, the decision to invest in the metaverse and its related assets should be made with careful consideration of individual investment goals, risk tolerance, and overall portfolio strategy. As such, it is important to consult with a financial advisor and conduct thorough research before making any investment decisions.