Despite some pullback from recent highs, the big technology stocks have remained resilient in the face of many challenges. Global tech companies have made a quicker recovery from the 2020 pandemic slump compared with the market setback of 2009.
Back then the recovery was slow and hesitant. It took four years for the S&P 500 to reach a new high after 2009 as the reversal affected a broad-based range of stocks, including big tech. This year, it took six months for the S&P 500 to again trade at its previous high.
But now it has stalled in what some analysts describe as a healthy correction.
Although the technology-rich Nasdaq Composite Index has gained 60% since its March lows, bouts of negativity may yet cause the index to stumble to lower levels. The tech market is carefully poised at present and dependent on the continued rolling out of new products and maintaining strong earnings.
But those investors betting on risk after the March lows have done much better than those exposed to the languishing traditional sectors such as energy, banking, retail and property.
The big-tech surge occurred despite defying deeply-held conventional market wisdoms. These include that it is prudent to diversify risk; to buy at low levels and sell at high valuations; and preferring solid, asset-rich, dividend-paying enterprises in trying times.
この記事は Finweek English の 8 October 2020 版に掲載されています。
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この記事は Finweek English の 8 October 2020 版に掲載されています。
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