Tuesday, January 28, 2020
Unless you were pulling a Rip Van Winkle, you already know that tech stocks dominated the 2010s.
Giants like Apple, Amazon, and Facebook soared more than 1,000%. And scores of small and micro-cap tech names soared even higher.
The thing is, for the 2020s, I expect this trend to continue…
That’s why tech is where you should be investing right now.
Let me explain why this is true — and then I’ll show you exactly how to profit from it.
Welcome to the Fully Digital World
Big trends tend to come and go.
That’s why, generally speaking, what worked in the markets last year (or for the last 10 years) won’t work in the future.
But that doesn’t take into account the impact of technology.
Think about it: unless you’re Amish, you probably couldn’t go an hour without using technology. And that includes all the hours when you’re sleeping — for example:
Even the contrarians acknowledge that tech will dominate the market in 2020s — even if they don’t realize they’re saying so.
Let me show you what I mean…
Above-Average Growth from Tech
Consider Mark Haefele, Chief Investment Officer of UBS Global Wealth Management. Here are his latest comments from Barron’s:
“Large-cap technology stocks probably won’t repeat their performance of the last decade, but other parts of the market do have the potential to deliver above-average growth,” he wrote.
Haefele suggests [investing in] stocks that focus on sustainable investing, genetic therapies, digital transformation, and alleviating water scarcity.
Newsflash: every market segment that Haefele mentions is a technology sector!
For instance, alleviating water scarcity won’t be possible without innovative technologies that focus on the conservation of precious resources.
Meanwhile, genetic therapies and digital transformation (which, by Haefele’s own admission, includes 5G, artificial intelligence, big data and cloud computing) are all about technology.
Bottom line: if you’re seeking the biggest returns over the next decade, you need to invest in tech.
Just the Stats, Please
Still not convinced?
Let me share a fascinating statistic.
As Bespoke Investment Group reported, the Tech sector’s weighting in the S&P 500 now tops 24%.
To put that in perspective, the next biggest weighting is Healthcare at just 14%.
So, simply based on weighting and momentum, tech stocks belong in every portfolio right now.
Of course, that doesn’t mean you should overpay for your investments. For example, Netflix’s P/E ratio of 78, or Tesla’s price-to-book ratio of 17, can’t be justified.
But if you know where to look, “bargains” still exist — even in the fastest growing tech sectors out there.
And next week, I’m going to share at least one of those bargains with you.
Ahead of the tape,
Ahead of the tape,