Infrastructure Investment: Is it Right for You?

by Andrew McGuinness  //  jun. 18, 2018

If you don’t yet know what infrastructure investment is, here is a short overview. Infrastructure is what allows modern society to run as smoothly as it does, it consists of transportation, energy, and communication systems.

A particularly profitable type of infrastructure investment is what is called ‘pure play’ infrastructure. This involves an investment in fundamental services that people require, and which therefore hold a position somewhat similar to that of a monopoly. Because of this, an investment in pure play infrastructure allows a steady profit to be gained within a very stable environment. Airports and toll roads are two good examples of pure play infrastructure.

Now that you are more aware of infrastructure investment, what it pertains to, and how exactly it may become profitable for people to invest in, how do you know if it’s right for you? The following are the three of the greatest benefits of an infrastructure investment. After reading about these, it should be clear whether the benefits infrastructure investment has to offer are worth your money and time.

1. Take part in the world’s expansion

Approximately $49 trillion will be used in order to perform infrastructure updates from now until 2030. Because of this, investing in infrastructure is a comparatively safe investment when considered alongside bonds, stocks, and equities.

However, the fact that as an investor you are contributing to the future renovation of the world is also undoubtedly a benefit. It has also been mentioned that the current poor financial state of a substantial amount of governments will lead to a greater dependence upon private and individual investors.

Infrastructure has actually grown to be an even more stable, profitable market than you may realize. Infrastructure businesses had a market capitalization of $400 billion in 2005. In 2017, however, the market capitalization of infrastructure has grown to reach a whopping $2 to $3 trillion.

2. Greater potential for profit

There is a very long, consistent history of profit involved in the field of infrastructure. But more than that, the profits you stand to receive from an infrastructure investment are relatively easy to foresee and not easily messed with. In the case of pure play infrastructure assets, for example, the profits you stand to gain are basically guaranteed due to the all-round indispensable properties that the services provide.

3. Diversification possibilities

Even if you only had a limited percentage of your capital invested in infrastructure, this can aid in the balancing of your portfolio, providing a stable cash flow so that your losses with stocks, bonds, or real estate do not have such a strong negative effect on your capital. Not only will a multi-asset portfolio consisting of an infrastructure investment be able to manage the risk of other assets, but it is also very likely to gain a reasonable profit of its own.

Conclusion

The truth is, infrastructure seems like the hidden gem among the large array of assets and investment possibilities available on the market. Even though every wise investor would let you know that investments are never guaranteed and always a risk, infrastructure is one of the safest bets on the market. Infrastructure investment has a lengthy history of profit and stability backing it up. Not only this, it also has an inevitably profitable future ahead of it due to the fact that the world keeps growing and infrastructure continues requiring updates to stay on track.





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