Sell-offs are how the stock market and its individual indexes change leadership. It's best to keep your focus on that. Try not to focus so much on what's happening with the big-cap tech stocks.
That's where institutions and frankly most individual investors are weighted right now. That's understandable. But I've been saying for the past few months it could be time to start cycling out of some of those big-cap tech stocks because they're so highly valued relative to their overall profits.
Think about where the growth is going to come from moving forward... rather than where the growth has been coming from.
Look at all of the big names: Facebook Inc. (Nasdaq: FB), Amazon.com Inc. (Nasdaq: AMZN), Apple Inc. (Nasdaq: AAPL), Netflix Inc. (Nasdaq: NFLX), Google parent Alphabet Inc. (Nasdaq: GOOG), Microsoft Corp. (Nasdaq: MSFT) and Tesla Inc. (Nasdaq: TSLA)...
Those stocks make up more than 15% of the S&P 500 and far more than that in the Nasdaq 100. And when these heavyweights see even a little bit of selling, it drives everything down.
There's a chance that we're at the back end of the pandemic if a vaccine is coming soon. And if that's the case, it could mean a lot of stocks that haven't done well during the recovery could soon see a boost. |
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