PROFIT FROM TINY TECH STOCKS
Kiplinger's Personal Finance|March 2020
Big-name leviathans have dominated the market, but the minnows may be catching up.
RYAN ERMEY
PROFIT FROM TINY TECH STOCKS

IT’S NO SECRET THAT LARGE TECHNOLOGY firms have led the way for much of the bull market. By now, every investor knows that FANG stands for Facebook, Amazon.com, Netflix and Google (although Google is now Alphabet). From the beginning of the bull market in 2009 through 2018, tech stocks in the large­company Standard & Poor’s 500­ stock index edged out tech stocks in the small­cap S&P SmallCap 600 by a half­percentage point per year, on average. As large­company stocks pummeled small firms across the board in 2019, Big Tech pulled in front big time, returning 50.3%, compared with 39.6% for small­tech firms.

But small tech firms may be poised to close the gap. Jim Paulsen, chief investment strategist at market re­ search firm Leuthold Group, likes to refer to them as “mini FANGs,” and he’s bullish on their prospects. Though small tech firms typically command an 18% valuation premium over large tech names, he says, stocks in the S&P 600 Capped Information Technology index currently sport the same average price­earnings ratio as those in the counterpart S&P 500 infotech index.

That’s even though analysts esti­ mate that over the next three to five years, profits for the small tech stocks will increase at twice the rate of big­ tech earnings, says Paulsen. And although small stocks tend to come with more volatility than large ones, small tech firms will largely avoid some of the risks tied to the tech be­ hemoths. “These firms aren’t in the crosshairs of regulators over privacy or antitrust issues,” he says.

TRY THE SMALL

Diese Geschichte stammt aus der March 2020-Ausgabe von Kiplinger's Personal Finance.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

Diese Geschichte stammt aus der March 2020-Ausgabe von Kiplinger's Personal Finance.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

WEITERE ARTIKEL AUS KIPLINGER'S PERSONAL FINANCEAlle anzeigen
FREE HELP FOR COLLEGEBOUND STUDENTS
Kiplinger's Personal Finance

FREE HELP FOR COLLEGEBOUND STUDENTS

This program’s mentors assist applicants as they fill out the FAFSA, write essays and more.

time-read
2 Minuten  |
December 2024
WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS
Kiplinger's Personal Finance

WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS

You typically need earned income to contribute to an individual retirement account, but a spousal IRA provides an important exception to this rule.

time-read
2 Minuten  |
December 2024
SELLING SHARES? HERE'S HOW TO MINIMIZE TAXES ON YOUR GAINS
Kiplinger's Personal Finance

SELLING SHARES? HERE'S HOW TO MINIMIZE TAXES ON YOUR GAINS

ET'S say you've been regularly buying shares in a booming tech company over the past few years, but now you want to start taking some of those profits, perhaps to rebalance your portfolio.

time-read
5 Minuten  |
December 2024
Strategies for Novice Investors
Kiplinger's Personal Finance

Strategies for Novice Investors

AS part of a lifes kills program for young, single mothers, I was asked to teach a class on how to get on top of your finances.

time-read
3 Minuten  |
December 2024
ANSWERS TO YOUR 529 PLAN QUESTIONS
Kiplinger's Personal Finance

ANSWERS TO YOUR 529 PLAN QUESTIONS

Thanks to recent policy changes, families have more options for what to do with money sitting in these tax-advantaged accounts.

time-read
6 Minuten  |
December 2024
Rate-Cut Winners and Losers
Kiplinger's Personal Finance

Rate-Cut Winners and Losers

NOW that the Federal Reserve has cracked the interest rate ice, the next development will be to separate winners from losers.

time-read
2 Minuten  |
December 2024
SHOULD YOU BUY THESE RED-HOT FUNDS?
Kiplinger's Personal Finance

SHOULD YOU BUY THESE RED-HOT FUNDS?

Covered-call ETFs are popular but come with plenty of caveats.

time-read
6 Minuten  |
December 2024
DIVIDEND STOCKS ARE READY TO REBOUND
Kiplinger's Personal Finance

DIVIDEND STOCKS ARE READY TO REBOUND

Our favorite dividend payers are poised to benefit as falling interest rates lure investors back.

time-read
10+ Minuten  |
December 2024
IS A 55+ COMMUNITY RIGHT FOR YOU?
Kiplinger's Personal Finance

IS A 55+ COMMUNITY RIGHT FOR YOU?

These age-restricted developments appeal to older adults seeking abundant amenities and an active lifestyle.

time-read
8 Minuten  |
December 2024
AT LONG LAST, RATES ARE DROPPING
Kiplinger's Personal Finance

AT LONG LAST, RATES ARE DROPPING

Consider these portfolio moves now that the Federal Reserve has cut its benchmark interest rate.

time-read
4 Minuten  |
December 2024