The rise of ‘investing activities’ is a big deal
An interesting new report by investment analytics firm Capgemini highlights how some sectors are more likely to see investment activity increase than others.
The report, called ‘Investing Activity, The Next Big Thing’, looks at how investments are being made, the people who are making them, and what they can expect.
The report finds that investing activities are becoming more mainstream.
More than half of companies in the US and Europe now report investing activity to staff, and 70% of US firms say they have invested at least some time in this space.
The rise in investment activity, Capgemint argues, is a positive development for the financial sector, as it is seen as a more reliable source of income than cash.
“There is evidence to suggest that the average person’s income is higher, and more stable, with an average annual income of $50,000 compared to $40,000 for the average US worker,” Capgeminini’s co-author Dr Chris Smith wrote in a press release.
In the US, a typical CEO earns more than $100 million, with a CEO earning $100m more than a typical worker.
Capgemini’s report also found that the number of firms that report investing activities has risen from 16% in 2014 to 30% in 2018.
While the US is a notable exception, it’s not the only market in the world where investing activities have grown in the last decade.
There are many other examples, from China to Brazil, where the rise of investing activities is occurring.
Chinese cities are now the world’s top investment centres, with the average Chinese CEO earning more than US$80 million, and an average worker earning $90,000, according to Capgeminis.
A study published in the Journal of the Association for Business Research last year showed that in 2019, Chinese cities accounted for 40% of the world total.
That’s an increase from just 14% in 2019.
This has led to a rise in the amount of Chinese billionaires owning more than half the wealth of the population, with Chinese citizens now worth $4.6 trillion.
But even though this growth in wealth is happening, the world is still far from a “golden age” of investing, Capgrave argues.
It is still possible for an investor to have an excellent investment strategy and then suddenly get hit with a recession and see their wealth shrink.
According to Capgrave, this could happen when companies fail or the economy becomes bad.
So while it’s important to keep an eye on investing activity, “the world’s largest and most important markets have not yet become gold mines”.
While this is true, Capgemiinini says the growth in investment activities is likely to continue as the financial services sector is a key sector.
When it comes to the financial service sector, the number one risk is “the global financial system”, Capgemina said.
And when it comes the financial industry, the financial system is now the biggest risk, with more than 80% of global losses attributed to financial sector issues, including losses in the financial market.
To learn more about investing activities, Capgermini recommends looking at the following: Capgrave’s ‘Investment Activity, the Next Big Things’ report.