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Top Three Wealth Management Investing Megatrends in 2021 | Year of Recovery | J.P. Morgan - YouTube
Channel: jpmorgan
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You might have noticed
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that the stay-at-home tech
darlings that defined 2020
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have struggled to continue
their outperformance as of late.
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And on the flipside,
the epicenter stocks,
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such as airlines and cruise
lines and rideshare services,
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have staged quite
a bit of a comeback.
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While this could be a glimpse
of what's to come in 2021,
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as the vaccines are
expected to be effective,
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year 2020 was the year
of the virus;
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year 2021 should be
the year of recovery.
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So let me talk about
the three megatrends
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of digital transformation,
healthcare innovation,
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and sustainability, and
what the year of 2021 means
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for each one of them.
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Digital transformation
has certainly
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been accelerated by COVID-19.
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And whether it's our use
of work from home
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or work out from home
or ecommerce apps,
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we've really seen their adoption
rise significantly this year.
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Well next year, there's a lot
more digital transformation
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to go in enterprises and their
adoption of key technologies
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like 5G and artificial
intelligence really stand out.
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So speaking of 5G,
what exactly is it?
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Well 5G is the next
generation of mobile technology
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that offers speeds at 100 times
faster than what we have today.
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And this is amazing
as it is impressive,
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and one of the reasons
why we're going to see
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the number of 5G
smartphone units sold next year
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likely double relative to
what we've seen in years past.
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But, the key breakthrough
development around 5G
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is that this is a key
enabling technology
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for many other
technologies to take off,
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whether it's augmented reality
or the factory of the future.
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So when we think
about what the killer app
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for 5G is going to be,
smart factories stands out.
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This is a factory that is
digital, it is automated,
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it is run by 5G-enabled
robots and cobots.
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And that is likely
to take off next year.
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Next on our list
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is the megatrend of
healthcare innovation.
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Innovation in
healthcare is not new,
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but what is really new today
is the speed of this innovation.
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So what is driving this
accelerating pace? Two things.
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First of all, it's our
much more advanced
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in-depth understanding
of human genomics.
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The second development
that is accelerating innovation
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is the artificial intelligence
and its capability
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to process vast amounts
of data in healthcare.
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When you combine
those two developments,
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it means that we may be
able to get to breakthroughs
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that much faster, and we can
identify that many more targets
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to explore for future
drug development.
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Because of these
technological breakthroughs,
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we are at a stage where
we can develop treatments
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that are the right treatment
for the right patient
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at the right time.
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So the future of
medicine is truly personal.
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Finally, the sustainability
megatrend and clean energy
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have been in the
spotlight all year.
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When it comes to clean energy,
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it's not only the
policy and politics
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that is pushing
towards clean energy,
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but it's also the
favorable economics.
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The cost of wind
and solar electricity
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has now fallen so much
that is has converged
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with the cost of coal
and natural gas.
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And next year, we expect
that it's going to be cheaper
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to build new
renewable electricity
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than to run an
existing coal plant.
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So this is why
this could truly be
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a pivotal point for the
adoption of clean energy.
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And it's not just governments,
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it's not just the
utility companies.
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It's also the residential
and commercial consumers.
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Consider this: more than
242 companies worldwide
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have committed to
100% renewable targets
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over the coming decade.
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So this corporate interest
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combined with the
favorable economics,
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and of course some
government support,
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all of this could mean that
adoption of clean energy
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is going to rise next
year and beyond.
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So why do we care
about these megatrends?
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We care because these
durable trends and companies
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and sectors that are tied
to them are likely to continue
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to drive revenue growth
and earnings growth
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that is likely to
outpace the benchmark
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and outpace the markets.
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And that should lead to
significant returns as well.
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So all else equal, these
megatrends are here to stay,
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and they're likely
to change and shape
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and disrupt the
world as we know it
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for years to come.
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