The three forces shifting the investment landscape

THREE factors heavily influenced the financial landscape over the last 12 months – AI-focused technological optimism, hoped-for levelling up, and higher government bond yields. All three will continue to be in play this year but in a manner that suggests greater volatility, and the need for an investing rethink that incorporates a larger universe of opportunities in both public and private markets.

Optimism about the productivity-enhancing potential of exciting tech innovations is reflected in the extent to which a handful of companies have led the surge in the S&P 500 Index from one record level to the next. It is a well-founded sentiment, given the many ways in which artificial intelligence will improve what we do and how we do it.

It is also warranted by the speed with which advances are being made. The money being thrown at the sector and the frequency of upgrades has some in the industry readily admitting that they are not sure where the technology will be in the next two years.