“Fine wine and stamps as well as art and other collectibles as investments tend to be uncorrelated to tech company equities and other asset classes and as such can serve as an effective hedge,” said Paul Cuatrecasas, chief executive of Aquaa Partners. REUTERS/Regis Duvignau/File Photo
regis duvignau/Reuters
Value investing is dead and investors will find long-term exponential growth in tech stocks, a report said on Friday.
Strategic advisory firm Aquaa Partners suggested that companies ignoring tech will stagnate and lose value, while indexes tracking tech firms will grow exponentially for the next two decades, far outpacing other investments.
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The London-based firm forecasts that the tech-heavy Nasdaq-100 index will reach 90,948 in 2040, around eight times higher than its current level — but while tech is a good bet, investors should bolster their portfolios with alternative investments.
“Fine wine and stamps as well as art and other collectibles as investments tend to be uncorrelated to tech company equities and other asset classes and as such can serve as an effective hedge,” said Paul Cuatrecasas, chief executive of Aquaa Partners.
The report suggests that the best long-term hedge is inflation-protected assets like property, fine wine, stamps, gold and cryptocurrencies.
Cuatrecasas is a tech-focused investment adviser who believes technology will become more pervasive in society, leaving companies ignoring its rise falling behind.
Aquaa Partners’ report considers tech companies like holiday rental unicorn Airbnb, chip maker Intel INTC, +0.22% and e-commerce giant Amazon AMZN, -0.38% that use technology to differentiate themselves, deliver products, or create a competitive advantage.
It was released on Friday, after tech company Apple AAPL, +5.15% recorded a $2 trillion dollar valuation on Wednesday. This was just two years after it first hit $1 trillion — which had taken 42 years.
“Apple is a great example of exponential value captured in a company’s growth,” Cuatrecasas said.
Aquaa Partners defy tech doomsters and suggest that the sector is now a safe-haven for growth.
The firm said that through 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 transitioned from being volatile and risky to becoming a safe haven of value over the long term,” the report said.
Cuatrecasas said: “The fundamental risk-reward relationship in finance is now consistently being broken: Tech now offers higher reward and lower levels of risk relative to traditional stocks.”
