Mature Tech Stocks Are Likely to Be a Good Value Play
Mature tech stocks are likely to be a good value play this year as the US economy strengthens and both consumer and business spending receives a boost.
The promise of technology stocks has translated into solid deliverables with strong earnings growth.
Facebook has proven to be a game-changer by introducing the world to the concept of social networking, something quite unheard of in the Y2K era.
The NADAQ’s dominant players have changed drastically in 15 years. The top ten stocks today have only three stocks in common with the NASDAQ of 2000.
The better-diversified NASDAQ is less prone to risk than the NASDAQ of 2000. The NASDAQ is a different index now.
There are many reasons why you shouldn’t fear the NASDAQ’s (QQQ) 5,000 level this time around. The ghosts of Y2K are indeed in the past.
The NASDAQ hit the all-important 5,000 level on March 2, 2015, for the first time after the dot com bubble burst of 2000.
High yield bonds are becoming increasingly correlated with the S&P 500 and might increase your risk exposure instead of giving diversification benefits.
Reserves of cash, if kept idle, lose their value over time.
Cash is the most liquid asset. Holding cash gives investors psychological comfort, as they have a safety net available for emergencies.
According to a survey last year by State Street’s Center for Applied Research, globally retail investors are holding 40% of their assets in cash.
If you’re preparing your portfolio for the short term, the allocation to cash should be high. As the horizon increases, allocation to cash should go down.
The main assets of the technology sector are human resources. So, capital expenditure for tech companies could involve money spent on innovation and R&D.
Despite headwinds in the form of soft wage growth, low inflation, and a falling labor participation rate, the labor market looks robust.
The number of persons employed part-time for economic reasons remains above the pre-recession levels. Full employment is still some way off.
Key takeaways from the jobs report reflect the labor market’s recent trends. The US economy added 295,000 jobs in February 2015.
The stronger-than-expected data is good news for the economy. However, Friday’s jobs report sent the markets into a tizzy.
Recently, Australian equities climbed to seven-year highs when the RBA (Reserve Bank of Australia) cut rates to a record low of 2.25% in early February.
The low-yield environment is causing investors to shift to equities. However, investors are moving away from US equities.
US markets remained relatively quiet last week as yields fell. However, bonds saw a sharp fall in yields as their prices rose.
But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.