Issue 31: 2016

Future Perspective

Time in the Age of Instant

High-speed digital technology has given us countless ways to manage how we spend our time. But is it also changing who we are?

Adam Voorhes/Gallery Stock

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Think of all you can accomplish in a flash. With the touch of a button you open the blinds, adjust the lights and set the thermostat. A loved one calls and you video chat after setting your robot vacuum cleaner to work. A quick check of your investment portfolio and you’re ready to make travel reservations. And all of that before breakfast.

That may seem like just another Saturday morning to you, yet thanks to technology you are in fact on the cutting edge of a revolution — in time. Digital devices — along with the servers, cables, computers and software that constitute the Internet (and cloud) — are exploding the familiar rhythms governing how we fill our days, empowering us as never before to make our own rules. Welcome to “time-shifting.”

BROADBAND PENETRATIONSee more
 

“Technology affords us the opportunity to quickly accomplish a range of tasks — from communicating to shopping to working — while on the go, often altering our daily consumption habits along the way,” says Christopher M. Hyzy, chief investment officer of U.S. Trust.

At what cost?

Call it the law of unintended consequences, but time-shifting can be troublesome — as you may have noticed. With an always-on connection we are more inclined to work at any hour, even on the beach. We often feel compelled to reply to a text the instant it arrives, no matter where we are. We stack our devices bedside and wonder why we can’t sleep. (See “Step Away From the Device,” below.)

Still, not everyone finds time-shifting problematic. Millennials (age 18-34) in particular appear to have adapted to it rather well — and in a distinctive way. “As the first generation to grow up in the digital era, they are in a way rendering time obsolete,” says Herbert R. Achey Jr., a senior equity analyst at U.S. Trust and an authority on consumer behavior. “Whether it be eating, sleeping or consuming entertainment, they’re more likely to do what they want, when they want.” No surprise there, perhaps.

A shift in the economy

What is increasingly clear is that technology is altering much more than our everyday behavior. It is reshaping the economy, as entire industries seek to redefine themselves, and do so quickly, or risk being left behind.

That might sound vaguely ominous but it need not. Ultimately, the economic story is likely to be positive, says Joseph P. Quinlan, Head of Market & Thematic Strategy at U.S. Trust. “This kind of disruptive innovation, where one product or concept supplants another, is common in the tech sector and can energize the economy and create investment opportunities.”  

STEP AWAY FROM THE DEVICERead more
Step Away From the Device

The microprocessor has changed how we relate to the clock, but not, it seems, without cost to our well-being. “Now that it’s possible to be connected 24/7, we can be more productive in our work,” says Mary Ann Bartels, head of Merrill Lynch Wealth Management Portfolio Strategy.** “At the same time we may feel more anxious, distracted and sleep deprived.” What’s the answer? “We need to step away from technology every now and then,” Bartels says. “Otherwise, we risk becoming overwhelmed.”

Photo: Pixdeluxe/Getty Images

IMPORTANT INFORMATION

Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

OTHER IMPORTANT INFORMATION

** Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated, a registered broker-dealer and Member SIPC, and other subsidiaries of Bank of America Corporation.

 

 

 

 


Within tech, Quinlan sees opportunities in cloud-based hardware and software, mobile application advancements, centennials joining millennials as tech natives, and the growth of smartphone use in emerging economies.

As you might expect, opportunities exist not only within tech but across a range of industries. Here’s our take on how innovation could reshape how you live — as well as your financial life — in the years ahead.

Travel

If you live in or near a city, you’ll know how much time can be frittered away on the nation’s highways and byways. “We lose billions of productive hours every year while in congestion or while recovering from injuries,” says Sarbjit Nahal, head of thematic investment at BofA Merrill Lynch Global Research.* “Lane-change warnings and other active safety features, soon to be standard on many new cars, together with rapid self-driving car developments, should make for faster and safer rides.”

TEXTING AND DRIVINGSee more
 

Down the road, says Quinlan, “self-driving vehicles even more advanced than those currently in development will almost certainly communicate with each other to provide a safer ride, with little or no human intervention. Whether we can use that time to work or watch a movie en route will depend on regulations that have yet to be written.” Among the likely winners are tech companies that are developing improved safety features, electric and autonomous cars, ride-sharing and robot taxis, as well as modernizing transportation networks to prepare for autonomous vehicles.

Entertainment

We may spend considerable time watching TV shows and movies on screens of many sizes. Yet the entertainment closely tied to digital technology is the video game. People of all ages play them, though millennials are the leading users, followed by centennials — those under 18 born after them.

“By the age of 18, half of our young people will have played 10,000 hours of games on average,” says Nahal. “In fact, modern humans have collectively spent far more time playing the action game Call of Duty than our species has been on the planet.”

Gamers spent some $22 billion on hardware and games in 2014, benefiting companies that design new games and the systems on which they are played, including tablet and smartphone manufacturers,1 Nahal says. “Today, the mobile phone is often the gateway device used by many young gamers when they first start playing.” (For more, see “In Conversation With Jane McGonigal.”)

Nahal sees investment opportunities in increased demand for game designers and gaming systems, and the use of smartphones for the consumption of media such as music, television, video games and movies.

SO YOU WANT MORE TIME?Read more
So You Want More Time?

You may wish you had more time on your hands, and there’s a good chance that you will — over the long run. Medical advances and improved access to healthcare have given many of us four additional years on the planet.3

Not enough? If gene-based and other treatments prove effective, some medical experts believe, we could routinely live into the triple digits. If you find the prospect appealing, you’re not alone. “A recent study cosponsored by Bank of America Merrill Lynch*** found that three out of four Americans would like to live to age 100, as long as they’re in good health,” Hyzy says.4 Hyzy would look for opportunities in pharmaceuticals, and in companies pursuing advancements in gene-based treatments and gerontology.

3 World Health Organization, 2014.

4 “The Sightlines Project: Seeing Our Way to Living Long, Living Well in 21st Century America,” Stanford Center on Longevity, Feb., 2016.

Photo: Horacio Salinas/ Trunk Archive

IMPORTANT INFORMATION

Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

OTHER IMPORTANT INFORMATION

*** Bank of America Merrill Lynch is a marketing name for the Retirement Services business of Bank of America Corporation.

 

 

 

 

 

Robotics

The combination of robotics and artificial intelligence, or AI, will also revolutionize the ways we use time, Quinlan says. “Cleaning robots are already changing how we allot our time at home, and programmable machines have been used in industry for years,” he says. “With accelerating developments in the fields of science and engineering, machines could be programmed to accomplish the complex tasks that are currently reserved for entire teams of people.” He points to long-range investment opportunities in AI and robotics.

But then, for other industries, and millions of workers, the rise of machines presents a potentially bleak future. “Many humans could lose their jobs to robots,” Quinlan says. And if industries, and indeed nations, fail to modernize in this way, they risk being turned into second-class citizens in the global economy. “These are some of the major issues in the digital era,” he says.

SETTING SAILSee more
 

Leisure

If you’d like to spend more time pursuing rest and recreation, you’re in good company, it seems. The so-called leisure economy is expanding and may be reaching a kind of tipping point. “Interest in cruise ships rose significantly last year, among all adults, including millennials,” says Mary Ann Bartels, head of Merrill Lynch Wealth Management Portfolio Strategy. “And boomers are collectively expected to spend some $120 billion on leisure travel in 2016.”2 On top of that, last year, for the first time ever, we spent more dollars at restaurant tables than we did at supermarket checkouts. This is in line with what Hyzy says is “a new emphasis on making memories that will last a lifetime,” through prioritizing events such as family vacations and dinners with friends. Bartels sees emerging opportunities in many aspects of the leisure economy, from restaurants to hotels to cruise ship lines.

Sharing

A skill learned in kindergarten should put you in good stead for the nascent sharing economy. Social media and smartphones have helped give rise to an entire ecosystem around reducing expenses and saving time by sharing goods and services with others: a carpool over a hailed cab, a bed-and-breakfast or a rented guest room in someone’s home over a hotel room. “The sharing economy is growing and we think it could be a $450 billion market opportunity in the United States alone,” Nahal says. “In fact, being able to meet a need so easily is shifting the whole notion of what personal ownership even is.” That seems to be the case not only for millennials, as you might expect, but also for older and younger generations.

What’s next?

No matter which generation you belong to, a smart device is probably helping you allot your time in innovative ways that were inconceivable even just a decade ago. From video chatting with grandkids to buying groceries online for parents, from banking while in-flight to reviewing a work proposal from a deck chair, we can accomplish so much in a very short time — and all from the palm of our hand. Do we sometimes feel overwhelmed by technology, as Bartels puts it? Indeed. But we’d better gird our loins. If the past is any indication, the pace of innovation will only increase as we move to meet the future — and discover ways to time-shift that are unimaginable today.  

For more information, contact your U.S. Trust advisor.

1 “NPD Group/Games Market Dynamics: U.S.” 2015.

2 AARP, 2015.

IMPORTANT INFORMATION

Some of the featured participants are not employees of U.S. Trust. The opinions and conclusions expressed are not necessarily those of U.S. Trust or its personnel.

Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

OTHER IMPORTANT INFORMATION

Equities Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

Technology stocks may be more volatile than stocks in other sectors.

* BofA Merrill Lynch Global Research is equity research produced by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) and/or one or more of its non-U.S. affiliates. MLPF&S is a wholly owned subsidiary of Bank of America Corporation. Any information presented in connection with BofA Merrill Lynch Global Research is general in nature and is not intended to provide personal investment advice. The information does not take into account the specific investment objectives, financial situation and particular needs of any specific person who may receive it. Investors should understand that statements regardingfuture prospects may not be realized.

** Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated, a registered broker-dealer and Member SIPC, and other subsidiaries of Bank of America Corporation.

 

Think of all you can accomplish in a flash. With the touch of a button you open the blinds, adjust the lights and set the thermostat. A loved one calls and you video chat after setting your robot vacuum cleaner to work. A quick check of your investment portfolio and you’re ready to make travel reservations. And all of that before breakfast.

That may seem like just another Saturday morning to you, yet thanks to technology you are in fact on the cutting edge of a revolution — in time. Digital devices — along with the servers, cables, computers and software that constitute the Internet (and cloud) — are exploding the familiar rhythms governing how we fill our days, empowering us as never before to make our own rules. Welcome to “time-shifting.”

BROADBAND PENETRATIONSee more
 

“Technology affords us the opportunity to quickly accomplish a range of tasks — from communicating to shopping to working — while on the go, often altering our daily consumption habits along the way,” says Christopher M. Hyzy, chief investment officer of U.S. Trust.

At what cost?

Call it the law of unintended consequences, but time-shifting can be troublesome — as you may have noticed. With an always-on connection we are more inclined to work at any hour, even on the beach. We often feel compelled to reply to a text the instant it arrives, no matter where we are. We stack our devices bedside and wonder why we can’t sleep. (See “Step Away From the Device,” below.)

Still, not everyone finds time-shifting problematic. Millennials (age 18-34) in particular appear to have adapted to it rather well — and in a distinctive way. “As the first generation to grow up in the digital era, they are in a way rendering time obsolete,” says Herbert R. Achey Jr., a senior equity analyst at U.S. Trust and an authority on consumer behavior. “Whether it be eating, sleeping or consuming entertainment, they’re more likely to do what they want, when they want.” No surprise there, perhaps.

A shift in the economy

What is increasingly clear is that technology is altering much more than our everyday behavior. It is reshaping the economy, as entire industries seek to redefine themselves, and do so quickly, or risk being left behind.

That might sound vaguely ominous but it need not. Ultimately, the economic story is likely to be positive, says Joseph P. Quinlan, Head of Market & Thematic Strategy at U.S. Trust. “This kind of disruptive innovation, where one product or concept supplants another, is common in the tech sector and can energize the economy and create investment opportunities.”  

STEP AWAY FROM THE DEVICERead more
Step Away From the Device

The microprocessor has changed how we relate to the clock, but not, it seems, without cost to our well-being. “Now that it’s possible to be connected 24/7, we can be more productive in our work,” says Mary Ann Bartels, head of Merrill Lynch Wealth Management Portfolio Strategy.** “At the same time we may feel more anxious, distracted and sleep deprived.” What’s the answer? “We need to step away from technology every now and then,” Bartels says. “Otherwise, we risk becoming overwhelmed.”

Photo: Pixdeluxe/Getty Images

IMPORTANT INFORMATION

Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

OTHER IMPORTANT INFORMATION

** Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated, a registered broker-dealer and Member SIPC, and other subsidiaries of Bank of America Corporation.

 

 

 

 


Within tech, Quinlan sees opportunities in cloud-based hardware and software, mobile application advancements, centennials joining millennials as tech natives, and the growth of smartphone use in emerging economies.

As you might expect, opportunities exist not only within tech but across a range of industries. Here’s our take on how innovation could reshape how you live — as well as your financial life — in the years ahead.

Travel

If you live in or near a city, you’ll know how much time can be frittered away on the nation’s highways and byways. “We lose billions of productive hours every year while in congestion or while recovering from injuries,” says Sarbjit Nahal, head of thematic investment at BofA Merrill Lynch Global Research.* “Lane-change warnings and other active safety features, soon to be standard on many new cars, together with rapid self-driving car developments, should make for faster and safer rides.”

TEXTING AND DRIVINGSee more
 

Down the road, says Quinlan, “self-driving vehicles even more advanced than those currently in development will almost certainly communicate with each other to provide a safer ride, with little or no human intervention. Whether we can use that time to work or watch a movie en route will depend on regulations that have yet to be written.” Among the likely winners are tech companies that are developing improved safety features, electric and autonomous cars, ride-sharing and robot taxis, as well as modernizing transportation networks to prepare for autonomous vehicles.

Entertainment

We may spend considerable time watching TV shows and movies on screens of many sizes. Yet the entertainment closely tied to digital technology is the video game. People of all ages play them, though millennials are the leading users, followed by centennials — those under 18 born after them.

“By the age of 18, half of our young people will have played 10,000 hours of games on average,” says Nahal. “In fact, modern humans have collectively spent far more time playing the action game Call of Duty than our species has been on the planet.”

Gamers spent some $22 billion on hardware and games in 2014, benefiting companies that design new games and the systems on which they are played, including tablet and smartphone manufacturers,1 Nahal says. “Today, the mobile phone is often the gateway device used by many young gamers when they first start playing.” (For more, see “In Conversation With Jane McGonigal.”)

Nahal sees investment opportunities in increased demand for game designers and gaming systems, and the use of smartphones for the consumption of media such as music, television, video games and movies.

SO YOU WANT MORE TIME?Read more
So You Want More Time?

You may wish you had more time on your hands, and there’s a good chance that you will — over the long run. Medical advances and improved access to healthcare have given many of us four additional years on the planet.3

Not enough? If gene-based and other treatments prove effective, some medical experts believe, we could routinely live into the triple digits. If you find the prospect appealing, you’re not alone. “A recent study cosponsored by Bank of America Merrill Lynch*** found that three out of four Americans would like to live to age 100, as long as they’re in good health,” Hyzy says.4 Hyzy would look for opportunities in pharmaceuticals, and in companies pursuing advancements in gene-based treatments and gerontology.

3 World Health Organization, 2014.

4 “The Sightlines Project: Seeing Our Way to Living Long, Living Well in 21st Century America,” Stanford Center on Longevity, Feb., 2016.

Photo: Horacio Salinas/ Trunk Archive

IMPORTANT INFORMATION

Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

OTHER IMPORTANT INFORMATION

*** Bank of America Merrill Lynch is a marketing name for the Retirement Services business of Bank of America Corporation.

 

 

 

 

 

Robotics

The combination of robotics and artificial intelligence, or AI, will also revolutionize the ways we use time, Quinlan says. “Cleaning robots are already changing how we allot our time at home, and programmable machines have been used in industry for years,” he says. “With accelerating developments in the fields of science and engineering, machines could be programmed to accomplish the complex tasks that are currently reserved for entire teams of people.” He points to long-range investment opportunities in AI and robotics.

But then, for other industries, and millions of workers, the rise of machines presents a potentially bleak future. “Many humans could lose their jobs to robots,” Quinlan says. And if industries, and indeed nations, fail to modernize in this way, they risk being turned into second-class citizens in the global economy. “These are some of the major issues in the digital era,” he says.

SETTING SAILSee more
 

Leisure

If you’d like to spend more time pursuing rest and recreation, you’re in good company, it seems. The so-called leisure economy is expanding and may be reaching a kind of tipping point. “Interest in cruise ships rose significantly last year, among all adults, including millennials,” says Mary Ann Bartels, head of Merrill Lynch Wealth Management Portfolio Strategy. “And boomers are collectively expected to spend some $120 billion on leisure travel in 2016.”2 On top of that, last year, for the first time ever, we spent more dollars at restaurant tables than we did at supermarket checkouts. This is in line with what Hyzy says is “a new emphasis on making memories that will last a lifetime,” through prioritizing events such as family vacations and dinners with friends. Bartels sees emerging opportunities in many aspects of the leisure economy, from restaurants to hotels to cruise ship lines.

Sharing

A skill learned in kindergarten should put you in good stead for the nascent sharing economy. Social media and smartphones have helped give rise to an entire ecosystem around reducing expenses and saving time by sharing goods and services with others: a carpool over a hailed cab, a bed-and-breakfast or a rented guest room in someone’s home over a hotel room. “The sharing economy is growing and we think it could be a $450 billion market opportunity in the United States alone,” Nahal says. “In fact, being able to meet a need so easily is shifting the whole notion of what personal ownership even is.” That seems to be the case not only for millennials, as you might expect, but also for older and younger generations.

What’s next?

No matter which generation you belong to, a smart device is probably helping you allot your time in innovative ways that were inconceivable even just a decade ago. From video chatting with grandkids to buying groceries online for parents, from banking while in-flight to reviewing a work proposal from a deck chair, we can accomplish so much in a very short time — and all from the palm of our hand. Do we sometimes feel overwhelmed by technology, as Bartels puts it? Indeed. But we’d better gird our loins. If the past is any indication, the pace of innovation will only increase as we move to meet the future — and discover ways to time-shift that are unimaginable today.  

For more information, contact your U.S. Trust advisor.

1 “NPD Group/Games Market Dynamics: U.S.” 2015.

2 AARP, 2015.

IMPORTANT INFORMATION

Some of the featured participants are not employees of U.S. Trust. The opinions and conclusions expressed are not necessarily those of U.S. Trust or its personnel.

Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

OTHER IMPORTANT INFORMATION

Equities Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

Technology stocks may be more volatile than stocks in other sectors.

* BofA Merrill Lynch Global Research is equity research produced by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) and/or one or more of its non-U.S. affiliates. MLPF&S is a wholly owned subsidiary of Bank of America Corporation. Any information presented in connection with BofA Merrill Lynch Global Research is general in nature and is not intended to provide personal investment advice. The information does not take into account the specific investment objectives, financial situation and particular needs of any specific person who may receive it. Investors should understand that statements regardingfuture prospects may not be realized.

** Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated, a registered broker-dealer and Member SIPC, and other subsidiaries of Bank of America Corporation.