Navigating a New Era: BlackRock’s 2023 Outlook with Five Investment “Mega Forces” – The Average Joe

    Navigating a New Era: BlackRock’s 2023 Outlook with Five Investment “Mega Forces”

    Victor Lei — Head of Research

    June 29, 2023

    June 29, 2023

    BlackRock (NYSE:BLK), the world’s largest asset manager, has released its 2023 midyear outlook report — highlighting five mega forces that’ll drive investment portfolios:

    1/ Digital disruption and artificial intelligence — “AI-driven productivity gains could boost profit margins.”

    • Companies that spend the most on staffing could see the greatest benefit of automation.
    • Those with large sets of proprietary data — which can be used to train AI models — are sitting on a “gold mine.”

    2/ Fragmenting world — “We see a world where national security and resilience take priority over efficiency.”

    • Recent events, including the Ukraine war and US-China trade disputes, have further divided nations.
    • Opportunities will surface as the West “pursues greater self-sufficiency in some areas, like tech and energy.”

    3/Aging populations produce less income, with implications for consumer spending and public finances.” This could have two major consequences:

    • Inflation: We’ve already seen the impact of a worker shortage — and more people leaving the workforce could lead to higher inflation in the long run.
    • Demand shift: An older population won’t necessarily spend less but will shift what they buy — leading to senior-targeted opportunities in healthcare, real estate and leisure.

    4/ Low-carbon transition — “A decarbonized economy will involve a massive reallocation of capital as energy systems are rewired.”

    5/ Evolving financial sector — “Banks face increased competition for financial services, and non-bank lenders are stepping in.”

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