What to expect of investing in the '90s.

• Author: Trumbull, George R.
• Position: Special Global Report

What worldwide trends are influencing the way we manage and invest money today? What trends in the investment business are influencing us? What will the investment environment look like over the next decade, and how will we as investors and financial managers cope with it?

We all agree that the world is changing. But future change and how we adapt to it is not the issue. Instead, it's can we adapt quickly enough to take advantage of what is happening around the world and invest our money well as those changes occur.

Here and abroad:

Executives need to take a large-scale look at the trends before making investment decisions. Globally, there has been a significant increase in the coordination of economic and financial policy among the successful countries, i.e., the Group of Seven. This has caused a reassessment of political and economic strategies everywhere in the world.

With the end of the confrontation in Eastern Europe, much of the billions of dollars committed to defense spending there can be redirected to building the infrastructure, cleaning up the environment, and improving the health care, education, and general welfare in the developing countries. Economic growth will occur, and companies will have opportunities to invest.

In 1992, besides seeing a unified Europe, we will see a North American trade zone, with Canada, Mexico, and the U.S. acting as a coordinated economic unit. The zone will have 375 million people, three governments, and three languages, and we shouldn't ignore this market just because it's close to home.

All the major industrial countries in the world have an aging population. They will need to either import labor or continue to export jobs. That includes the United States. Immigration, if managed well, can offset some of the potential social security and other societal problems in the decades ahead. If it's not managed well, we'll have to export more jobs, which means there will be investment opportunities in job creation, if not in the immigration process.

The U.S. and other industrialized countries, excluding Japan, will move from a spending to a savings orientation as the population ages. That may dramatically alter the creditor/debtor status of major countries.

And credit will be much more difficult to get in the years ahead. The rules will be tighter, and that will change the face of investing and managing money. Because of this, Japan is losing its cost-of-capital advantage, which should result in an...