Why Life Seems Faster
Does it seem like technology is moving faster over time? It’s not your imagination; it is. Innovations are being developed more quickly and diffusing through our society more quickly than ever before with dramatic consequences for economic growth and investing.
  • By 1900, the stove had reached 10% penetration of U.S. households; it would be another 60 years before it reached 100% penetration. Newer technological innovations such as the internet, smartphone and social media achieved majority penetration in a fraction of the time. 

  • As we wrote in The Enduring Force of Innovation, technological advances occur at an exponential rate, which means the rate of change is accelerating. This causes newer innovations to develop more quickly and become adopted by society faster.

  • The exponential growth of innovation should inspire confidence in the bigger picture of growth through innovation without having to predict the next invention or becoming overly concerned with the ebb and flow of economic cycles. 

  • Because the rate of change is increasing, value stocks that appear cheap may simply be victims of change while growth stocks, the purveyors of change, may benefit.

The views expressed are the views of Fred Alger Management, Inc. as of June 2018. These views are subject to change at any time and they do not guarantee the future performance of the markets, any security or any funds managed by Fred Alger Management, Inc. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

Risk Disclosure: Investing in the stock market involves gains and losses and may not be suitable for all investors. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Many technology companies have limited operating histories and prices of these companies' securities have historically been more volatile than other securities, especially over the short term. Technology companies may also face increased competition, government regulation, and risk of obsolescence due to progress in technological developments. 

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