Download Ashvin Chhabra

THE DIGITAL ECONOMY:
THRIVING IN A DISRUPTIVE
ENVIRONMENT
PALM BEACH STRATEGIC FORUM
April 7, 2014
Ashvin Chhabra
Chief Investment Officer
Merrill Lynch Wealth Management
Bank of America
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ARRAXXYQ
2
500 Years of Financial Markets
AGRICULTURE
1500
INDUSTRIAL
1700
DIGITAL
2000
3
World GDP over the Last 500 years
Percentage of World GDP (Last 500 years)
100%
80%
33%
29%
60%
18%
20%
31%
27%
22%
25%
50%
40%
20%
30%
49%
51%
47%
40%
43%
48%
19%
17%
1900
2000
0%
1500
1600
China and India
1700
1800
US and Western Europe
All other
Source: Angus Maddison, University of Groningen
4
The Digital Revolution
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Wealth Allocation Framework
Considers three dimensions of risk to help achieve life goals:
"Personal" Risk
"Market" Risk
Protect basic standard of living
Maintain lifestyle
"Aspirational" Risk
Enhance lifestyle
Bonds
Preserve
Lifestyle,
Liquidity & Safety
•
Reduce downside risk
•
Willing to accept
below-market returns
in return for less volatility
Low
Stocks
AI
•
Balance risk and return through
traditional asset allocation from a
broadly diversified portfolio
Risk/Return Spectrum
•
Take measured, but significant
risk to potentially enhance return
High
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