“What about this overcrowded land? …” — “Mercy, Mercy Me” by Marvin Gaye
Each Jan. 1, communities throughout Florida celebrate the first baby born in the new calendar year. Who will this baby become, we wonder. Will we know this child as an adult? Will he or she remain a local resident, perhaps even become a community leader? This annual local birth inspires us and speaks of limitless possibilities and the future.
Adnan Nevic was born on Oct. 12, 1999, in Sarajevo, Bosnia. Adnan’s birth was also especially significant, even beyond the borders of Sarajevo, and had global implications. Adnan’s birth, you see, pushed the world’s population to six billion people.
In the 75 years before Adnan was born, from 1924 to 1999, world population tripled. Two hundred years before Adnan was born, in 1799, there were only a billion people on our planet.
How long did it take the world population to reach one billion? It took from the beginning of time to the aforementioned date, 1799. However long you think that period of time was, it was very definitely slow growth compared to current trends. Our latest new billion in population growth was achieved in only 12 years.
The United Nations recently revised its population growth estimates. The U.N. now estimates that in 86 years, in the year 2100, the world’s population will be 10.8 billion, instead of 10.1 billion.
So how is a report on the world’s population growth curve commensurate with an investment column?
First, let’s consider consumer staples. What will all these new global residents need? Among other things, they’ll need food, shelter and clothing, and personal care products, like diapers and toothpaste. They’ll need pet food, nail clippers, brushes and combs. They’ll need health care and education and transportation and computers and cell phones. And they’ll consume ever-increasing amounts of energy. In short, they’ll need all of life’s essentials, the same things that we utilized in raising our children and families along with new technologies.
In our view, investing in the companies that produce or supply these needs may not be a bad idea.
This is the time of year when market prognosticators are plentiful, so here’s our two cents. For 2014, continue to look for U.S. multi-national corporations whose shares are still selling at reasonable prices.
Depending on your particular investment objectives, you may want to favor those companies that value their shareholders and prove it by increasing dividends paid each year. While the share price of utility companies generally do not shine in a rising interest rate environment, it is tough to beat those stable, get-paid-every-quarter dividends that can offer a bond-like equity in an environment where holding longer term debt may be a risky proposition.
Margaret R. McDowell, ChFC, AIF, a syndicated economic columnist, chartered financial consultant and accredited investment fiduciary, is the founder of Arbor Wealth Management, LLC, (850-608-6121 —www.arborwealth.net), a fee-only registered investment advisory firm located near Sandestin.