About Michael Young

I am the manager of a small investment fund that focuses on alternative investment opportunities that earn safe and steady investment returns for investors.

Container Investing Is An Alternative To Traditional Investments

Many investors are growing tired of worrying about the poor performance of stocks and bonds in their portfolio. To relieve the pressure, a growing number are seeking alternatives to the traditional investments they hold.

At the top of the list of the most popular alternatives is investing in containers. There are three reasons for this investment’s rise in popularity.

  1. It is a hard asset.
  2. It produces income.
  3. There is a growing demand.

Hard Assets

In the event of currency devaluation or rising inflation, hard assets have proven that they can protect your portfolio against losses experienced by traditional investments. In fact, hard assets are negatively correlated to stocks and bonds; meaning that they tend to behave differently and move in the opposite direction of equities. This is because hard asset investments have a fundamental, intrinsic value. Let me explain …

In the last several years, Warren Buffett has purchased two railroad companies, the Burlington Northern and Santa Fe Railroad. Why did he buy these? A railroad, like shipping containers, is a hard assets that makes money by moving other hard assets. Warren Buffett invested paper money into hard assets, so that if the dollar was to drop to zero it has no effect on his investment, he still owns a railroad!

Making an investment in hard assets is more appealing and much simpler than it was years ago. In today’s marketplace there are an increasing number of alternative investment opportunities that are easier to buy into, than stock was “in the old days.” A container investment is definitely one of the easiest.

Income-Producing

People on a fixed income, like pensioners and retirees, would benefit greatly from investments that earned a steady revenue and supplemented their retirement.

The shipping containers that investors have invested in are leased to shipping and logistics companies, and generate a monthly income for transporting different types of cargo. The revenues generated from the lease of the containers provide additional income for the investor.

Over the lifetime of a container, which is 10 years or more, leasing revenues can add up to a large sum of money for investors.

Rising Demand

As the world economy continues to grow, it can be expected that the demand for shipping containers will increase as well. With countries across the globe working toward increasing their GDP, more and more containers will be needed to facilitate their growing imports and exports.

In the last couple of years, two significant projects have contributed to the long-term demand for containers. The Panama Canal expansion and China’s One Belt, One Road initiative have revived trade routes and opened the door to more capacity, that will continue to support the need to ship cargo.

Summary

The most appealing aspects of an investment in shipping containers is that there is a constantly rising demand for the income-producing hard assets. Across the world’s busy highways, railways, and seaways, shipping containers are generating wealth for countries and investors.

Who is Driving Global Economic Growth?

Trade growth has slowed since 2012, relative to both its strong historical performance and to overall economic growth. According to data provided by the IMF, the overall weakness in economic activity – in particular in investment – has been the primary restraint on trade growth. Also contributing to the slowdown has been the waning pace of trade liberalization and the recent uptick in protectionism. Average annual global output growth through 2021 is estimated to be 3.0 percent.

The global economy remains sluggish moving into 2017, but the growth outlook is nevertheless somewhat stronger than in recent years. After slow momentum in 2016, global growth is projected to recover to 3.4 percent in 2017. This forecast reflects a more subdued outlook following the June 2016 U.K. vote in favor of leaving the European Union (better known as Brexit), as well as weaker-than-expected growth in the United States. Financial market sentiment toward emerging market economies will continue to improve in 2017, with emerging Asia in general and China and India in particular seeing the highest levels of dynamism over the next five years.

emerging markets performance

After years of increasing global economic integration, politicians are facing significant political pressure to limit imports. In June 2016, the WTO reported that the application of new trade restrictions by G20 economies reached its highest level since the organization began monitoring them in 2009. This increased protectionism is one reason why global trade remains below its pre-crisis peak, and continues to suffer from slow growth. The WTO estimated that trade expanded by a mere 1.7 percent in 2016, the slowest pace since the global financial crisis

Geopolitical tensions have been rising, leading to territorial disputes and international sanctions. At the same time, domestic politics is becoming more unpredictable in many countries around the world. Because of this, progress on multilateral free trade agreements such as the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP) are increasingly unlikely to be ratified in the short to medium term.

Addressing the general weakness in economic activity, especially in investment, will stimulate international trade. This could in turn help strengthen productivity and growth. In addition, further reforms that lower trade barriers would boost the international exchange of goods and services, and in doing so it will revive trade and encourage growth.