- Peter Oppenheimer — the chief global equity strategist at Goldman Sachs — said in a Bloomberg interview that investors should diversify out of popular mega-cap tech names and consider three new areas within the sector: medical tech, educational tech, and environmental tech.
- He said that the new bull market we’re in right now will be driven by large tech firms, similar to the prior instance, as digital revolution disrupts the nature of many “traditional businesses.”
- Oppenheimer also said the traditional 60/40 portfolio is likely to generate “very low return.”
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Investors with all of their holdings concentrated in mega-cap tech stocks may want to diversify into three specific areas within technology that are likely to grow during this new bull market phase, according to Goldman Sach’s Peter Oppenheimer.
The chief global equity strategist told Bloomberg on Wednesday the new cycle we’re in will continue to be dominated by technology and growth companies, but investors should “look at how technology is evolving,” and broaden their stock portfolios accordingly.
Oppenheimer listed medical, educational, and environmental technology as three specific areas that investors can use to diversify. he pointed to Europe’s Green New Deal plan to emphasize that environmental technology is likely to “be a really significant theme over the next ten years or so.”
The continued domination of technology is consistent with the ongoing shift to more negative real interest rates and a result of how technology companies are disrupting traditional businesses as the digital revolution continues, he added.
"Strategically we're in a new bull market phase, but the secular trend is probably likely to be quite similar in terms of leadership," Oppenheimer said.
He also noted that continued low interest rates are pushing investors away from the traditional 60/40 portfolio.
"A 60/40 equity, bond mix has generated one of the longest and strongest bull markets in history, and a good chunk of that, given that we're at the zero bound, is likely to generate a very low return, if not a zero return," Oppenheimer said. "So moving up the risk curve is partly what these policies are doing."