Nailing Thematic Investing: Getting a Structural Feel Of Opportunities

Image source: bankrate.com

A lot of people in the business are trying out thematic investment strategies. Thematic investing is about purchasing a group of stocks relevant to a certain sector or domain, which effectively distributes risk within a portfolio.

It is also about looking for long-term political, economic, and social trends and opportunities with lasting impact to clients in different sectors and locations. Thematic investors need to learn how structural trends will affect returns on some of their assets. They need to be sensitive about the advantage or disadvantage in sectors and regions where thematic strategies will be concentrated.

There are multiple benefits to thematic investing. It allows an investor to create investment opportunities in hot spots. Systematic investment processes can also contribute to a deeper understanding of value creation and risk. It is a dynamic and flexible way to validate and express business hunches by applying the rules of making sound investment decisions.

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It is important, though, not to put money on fads. Good themes are usually underrated or misunderstood, but these have staying power. They will give the investor or the business a reasonable profit.

Not everyone can keep up with the thematic investing. Do your research, and see if this will benefit you and your business.

Jon Bourbeau is the founder of Pacer Partners, a real estate boutique firm that practices thematic investing strategies. To know more about the real estate business, visit this blog.