### Thematic Investing: Strategies for Long-Term Growth

Successful thematic investing requires identifying long-term trends and diversifying across companies to manage risks effectively.

### Thematic Investing: Identifying Trends for Long-Term Success
* 📈 Some of the greatest investors, like John Templeton, succeed by **identifying long-term trends** and investing in companies that benefit from them, such as his **significant investments in Japan during its post-war recovery**.
* 🔍 Thematic investing involves recognizing key trends—such as **AI, energy transition, and cybersecurity**—and diversifying across these themes to **manage risks effectively**.
* 💡 Successful thematic investing requires three steps: **identifying a long-term trend**, **selecting the right companies**, and **continuously monitoring and potentially rebalancing your portfolio**.
* 💰 Current trends include artificial intelligence, which is **revolutionizing drug discovery**, and the energy transition, focusing on **renewable energy infrastructure** and commodities like **copper**.
* 🌍 Behavioral trends, such as **experiential spending** and **increased online security needs**, as well as reshoring due to **geopolitical concerns**, also present investment opportunities.
* 🔄 Diversifying investments across multiple themes is crucial to **mitigate risks associated with single-theme investments**, as evidenced by the failed Stemmann Oceanographic Fund.
* 📊 When investing, consider market volatility and the timing of entry, as **crowded trades can lead to overvaluation**, but **technological advancements can also create opportunities for growth**.
* 🔑 Ultimately, thorough research and a long-term commitment to chosen themes are essential for successful thematic investing, ensuring you are **prepared for market fluctuations and changes in trends**.

Long Term Investing With Thematic ETFs

My name is Ramin Nakisa and I started PensionCraft in 2016 as I felt strongly that I wanted to teach people how to invest well for themselves so they could stop making costly mistakes and losing their money through having to pay unnecessarily high fees.

Before starting PensionCraft, I worked in investment banking as a strategist and I was a frequent contributor on CNBC and Bloomberg TV. I have written two books about finance and investment: one for professional investors and one that explains how to buy and sell volatility using exchange-traded products.

I publish a new video on YouTube every Saturday and you can join me for a live Q&A on the 1st Thursday of every month at 7pm UK time.

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Introduction to Thematic Investing and John Templeton's Example

Successful investors identify long-term trends and invest in companies benefiting from them.

The video explores thematic investing, focusing on AI, energy transition, and cybersecurity.

John Templeton's successful investment in Japan in the 1950s and 60s is highlighted as an example of thematic investing.

Three key elements of successful thematic investing are identifying long-term trends, identifying benefiting companies, and monitoring the theme.

Two approaches to thematic investing are investing in individual stocks or buying thematic funds.

Artificial intelligence (AI) is discussed, highlighting its transformative impact and potential for future applications.

The energy transition is presented as another theme, focusing on increasing demand for commodities and renewable energy infrastructure.

Experiential spending and the growth of online interactions are mentioned as behavioral trends with investment implications.

Cybersecurity is highlighted as a theme benefiting from increased online activity.

Reshoring of manufacturing processes is presented as a final theme, driven by political and strategic considerations.

Diversification and Risk Management in Thematic Investing

Diversification across themes is recommended to mitigate risks associated with individual themes failing to materialize.

The Stemmann Oceanographic Fund is used as a case study of a theme that did not succeed.

Two diversification strategies are suggested: holding global index funds alongside thematic funds and diversifying across different thematic funds.

Correlation analysis of WisdomTree thematic funds is used to illustrate diversification principles.

Thematic investments are often popular and crowded trades, potentially leading to overvaluation.

Valuation is not the only factor; unforeseen technological advances or regulatory changes can drive performance.

Setbacks in a theme can present buying opportunities at more reasonable prices.

The key question when considering investment timing is whether the theme remains intact.

The video concludes with a recommendation to research themes thoroughly and maintain a long-term perspective.