The record market highs and record volume are positives, but the speculative run-up in Internet stocks and rising interest rates are not. One great long-term theme clearly is information and communications technology. Some tech stocks are having corrections, but our experts still see opportunities in this area. Bandwidth is the carrying capacity of a communications line, a critical link in the Information Revolution. The beneficiaries will be cable and cellular companies, satellite communications and telephone service companies, where we already see a lot of merger activity.
Demographics is another good theme.
This bodes well for companies in leisure time, financial services, and most of all, health care. Our experts particularly like some of the biotech companies that are solving medical and longevity questions and bringing down costs. Health care has undergone a major transformation, from a largely public and voluntary industry to one that s largely private. We also foresee a growing role for the private sector in education, as the concept of lifetime learning takes root. Recently, U.S. investors began turning to cyclical and capital goods stocks for the first time in many years.