When presented with a product to invest in, investors often try to figure out whether the product is a trend or a fad.
Trend refers to a general direction or pattern of change that is happening over a long period of time. Trends are usually gradual and persistent, often continuing for several years or more. For example, the trend of people using smartphones for internet access is a well-established trend that has been happening for over a decade.
Fad, on the other hand, refers to a short-lived craze or phenomenon that is popular for a limited period of time and then fades away quickly. Fads are often driven by fashion, media, or popular culture, and they tend to be very specific to a particular time and place. For example, fidget spinners were a popular fad a few years ago, but they quickly lost their popularity and are no longer widely used.
Example of trends:
- Increased use of technology for communication and entertainment
- Growing interest in sustainable and eco-friendly products
- Increased demand for plant-based and vegetarian diets
- Popularity of remote work and flexible schedules
- Rising trend of fitness and wellness
- Growth of e-commerce and online shopping
- Increased use of renewable energy sources
- Popularity of subscription-based services (such as Netflix)
- Growing trend of urbanization and migration to cities
- Increased focus on mental health and self-care.
Example of fads:
- Fidget spinners
- Beanie babies
- Hula hoops
- Rubik’s Cubes
- Chia Pets
- Troll Dolls
- Slap bracelets
- Tickle Me Elmo
- Cabbage Patch Dolls
- Moon Shoes
- Pet Rocks
- mood rings
- Razor scooters.