“Fine wine and stamps, as well as art and other collectibles, because investors have the correlation for tech business stocks and other asset classes and as such can serve as an effective hedge,” said Paul Cuatrecasas, CEO of Aquaa Partners. REUTERS / Regis Duvignau / Triemfoto
regis duvignau / Reuters
Value investing is dead and investors will eventually find exponential growth in tech stocks, a report said on Friday.
Strategic advisory firm Aquaa Partners suggested that companies that ignore tech will stagnate and lose value, while indices that follow tech companies will grow exponentially for the next two decades, and other investments will increase significantly.
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The London-based company predicts that the tech-heavy Nasdaq-100 index will reach 90,948 by 2040, about eight times higher than its current level – but while tech is a good bet, investors should back up their portfolios with alternative investments.
“Fine wine and stamps, as well as art and other collectibles, because investors have the correlation for tech business stocks and other asset classes and as such can serve as an effective hedge,” said Paul Cuatrecasas, CEO of Aquaa Partners.
The report suggests that the best hedge for the long term is inflation-protected assets such as property, fine wine, stamps, gold and cryptocurrencies.
Cuatrecasas is a tech-focused investment advisor who believes that technology will become more transparent in society, leaving companies ignoring that their rise is lagging behind.
The report by Aquaa Partners considers tech companies such as holiday rental unicorn Airbnb, chipmaker Intel INTC,
and e-commerce giant Amazon AMZN,
who use technology to differentiate themselves, deliver products or create a competitive advantage.
It was released Friday, according to tech company Apple AAPL,
registered a $ 2 trillion dollar valuation on Wednesday. This was exactly two years after it first hit $ 1 trillion – which had taken 42 years.
“Apple is a great example of exponential value established in the growth of a business,” Cuatrecasas said.
Aquaa Partners disputes technological dooms and suggests that the sector is now a safe haven for growth.
The company said that due to the coronavirus-induced market crash, tech stocks saw a maximum loss of 21.2%, while non-tech stocks saw a maximum fall of 36.4%.
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“Since the late 1990s. The tech sector has been transitioning from volatile and risky to a safe haven of long-term value,” the report said.
Cuatrecasas said: “The fundamental relationship with risk-taking in finance is now being consistently broken: Tech now offers higher pay and lower levels of risk relative to traditional equities.”
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