THE DIGITAL ECONOMY:

THRIVING IN A DISRUPTIVE ENVIRONMENT

PALM BEACH STRATEGIC FORUM April 7, 2014

Ashvin ChhabraChief Investment OfficerMerrill Lynch Wealth ManagementBank of America

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AGRICULTURE INDUSTRIAL DIGITAL

500 Years of Financial Markets

1500 1700 2000

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World GDP over the Last 500 years

Percentage of World GDP (Last 500 years)

Source: Angus Maddison, University of Groningen

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The Digital Revolution

66

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"Personal" Risk

• Reduce downside risk

• Willing to acceptbelow-market returnsin return for less volatility

Protect basic standard of living

Preserve

Lifestyle,

Liquidity & Safety

"Aspirational" Risk

• Take measured, but significant risk to potentially enhance return

Enhance lifestyle

"Market" Risk

• Balance risk and return through traditional asset allocation from a broadly diversified portfolio

Maintain lifestyle

Stocks

Bonds

AI

Considers three dimensions of risk to help achieve life goals:

Low Risk/Return Spectrum High

Wealth Allocation Framework