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4 Investment Themes for the Year Ahead

Some of the most promising opportunities for investors in 2020 could be ones that present solutions to the world’s most pressing problems, believes Michael Hartnett, Chief Investment Strategist for BofA Global Research. Watch our video to learn more.

Outlook 2020

4 Investment Themes for the Year Ahead

With Michael Hartnett

Chief Investment Strategist, BofA Global Research


Please see important information at the end of this program. Filmed on 11/12/2019

We believe that the best investment themes in 2020 are really going to be the solutions to the issues that investors are worried about.


1: Inequality & Populism

For example, inequality and populism. One way to address that is obviously via …


Fiscal policy & infrastructure spending

… fiscal policy and particularly infrastructure spending.

So one theme going forward we think is certainly going to be global infrastructure plays,

[B-roll of utilities and industrial footage]

…particularly in sectors like utilities, energy, or even the industrials.


2: Climate Change

Climate change is also a subject that people are very, very worried about.

[B-roll of solar panels]

One of the industries that we think looks appropriate in terms of addressing this problem is the solar industry. So that's another thing that we think will pick up going forward.


3: Demographics

Another theme is obviously demographics. This is always a theme but we are seeing this dramatic aging of the population. What does that mean?

[B-roll of biotech and healthcare footage]

To us, it means that health care and biotech are the most likely sectors to take over the leadership of the equity market from technology.

It will also offer opportunities for asset managers, particularly those that can address the needs of an aging population and delivering a good and sensible way for them to save going forward.


4: Emerging market consumer

Emerging markets we think after a number of years where they've been out of fashion, the consumer continues to grow in emerging markets.

[B-roll of emerging market consumers and satellite footage]

Just in 2019 you saw 100 million more Indians and Chinese join the Internet. And that's a lot of spending power. So we think the emerging market consumer is also a good theme going forward.

Of course, with themes there always comes risks. [TEXT ON SCREEN]

Inflation could be a key risk in 2020

The most obvious one is inflation. What we've enjoyed for a number of years now is falling interest rates and rising earnings, and we've been able to enjoy that because inflation has been low.

The greatest risk to markets really in 2020 is a surprise rise in inflation that reduces earnings and raises interest rates and unwinds some of the gains that we've enjoyed in recent years.


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