Bank of America CorporationThe strategist released a new list of what he called the science and technology "moon landing plan" to guide investors to find the next Amazon.Com Inc.Or Apple IncThe company.
According to strategists led by Haim Israel, head of global thematic investment research at Bank of America Corporation, from sixth-generation telecommunications networks (the entire collection of the New York Public Library can be downloaded in 20 seconds) to wireless power, the things that can fundamentally change people's lives are not as far away as people think.
"if we fail to discover the technology of the future today, it could mean missing the next major revolution," Israel wrote in a report to clients. He points out that the adoption of many technologies, such as smartphones or renewable energy, has exceeded experts' forecasts for decades because we often think linearly, but the progress is growing exponentially.
Early investment in the next rising star is crucial to the success or failure of a person's investment in stocks. Bank of America Corporation cites research by Hendrik Bessembinder, a professor at Arizona State University, that in the past 30 years, all the wealth created by global stock markets has come from 1.5 per cent of companies.
At the same time, due to the acceleration of innovation, existing enterprises have been replaced at a faster speed. Take the lifespan of companies in the S & P 500 as an example. In 1958, the average life expectancy of the company was 61 years. That time will be shortened to 24 years by 2016 and is expected to halve to 12 years by 2027, according to Bank of America Corporation.
The company's forecast comes at a time when thematic investments, which focus on understandable and relevant arguments, are becoming more and more popular. Led by Cathie Wood's Ark Investment Management products, ETF, based on market niches, attracted $42 billion in new capital investment this year, exceeding the total inflow for the whole of 2020, according to the data.
Innovative companies that invest in early stages usually need to be able to withstand losses, whether in terms of company performance or stock performance. For example, Goldman Sachs GroupAn index of non-profit technology companies in an innovative industry, which fell nearly 40% earlier this year, has not yet recovered half of its lost ground. Of course, not everyone can blossom and bear fruit.
For Bank of America Corporation's Israel, the return on investing in rising Star is not negligible. His team estimates that the 14 technologies for the future currently represent a market size of only $330 billion. Taken together, they could grow by 36% a year to $6.4 trillion by the 2030s. By contrast, profits of companies in the s & p 500 index have grown by 6% a year.
Strategists write that these new technologies could transform and upend multiple industries, contributing to the next big cycle of technology-driven growth.