www.varchev.com

Decline in tech stocks opens up new opportunities in Q4. Who are they.

Trading in technology lost momentum over the summer, which could create opportunities for tactical trading in the fourth quarter, several investors told CNBC. The Nasdaq Composite increased by 2.6% in the third quarter, lagging behind the broader S&P 500, which rose by 5.5%, and the small-cap Russell 2000, which jumped by 8.9%. Nvidia and Microsoft, two pillars of artificial intelligence trading, recorded declines during the quarter. Nvidia’s stock fell in the third quarter even as the broader market rose. However, many investors are cautious about completely exiting technology trading, even after several difficult months. “In the third quarter, we definitely saw this rotation, and some of the leading tech companies lagged. However, in September, this reversed.

“I think this particular rotation out of large-cap momentum stocks may not have finished the quarter as strongly as it started,” said James Ragan, director of wealth management at DA Davidson. The slowdown in momentum could provide investors with an opportunity to take a closer look at how much of their portfolios are exposed to the so-called “Magnificent Seven” stocks. Even after the recent decline, these stocks still represent about 31% of the S&P 500, and in many technology or growth-focused funds, even more. “We’re not saying not to own the Magnificent Seven; we’re saying to adjust your exposure to it. It doesn’t have to be over 30% upfront. …

“There are other growth stories besides the Magnificent Seven,” said Frank Tedesco, an analyst at Astoria Portfolio Advisors. One way to reduce exposure to these names would be to use funds that limit the weight of individual stocks or to make the weights equal in the portfolio to reduce reliance on any one name. This idea worked well in the third quarter, as the Invesco S&P 500 Equal Weight ETF (RSP) rose by 9.1%, outperforming all major indices. This equal-weight version of the S&P 500 surpassed the regular S&P 500, Nasdaq Composite, and Dow Jones Industrial Average in the third quarter. Astoria launched a new product in a similar vein, starting the U.S. Quality Growth Kings ETF (GQQQ) last week, with no stock representing more than 5% of the fund. Investors could also sell some of their top performers and try to find better value elsewhere before the earnings season and year-end, Ragan said. “Most of the time, the technology sector is expected to report quite good earnings growth when the numbers start coming in.

“So we may still see some growth based on that. But our message, based on what we believe at this moment, would still be to take some profits from some of these names and continue to spread the risk a little more,” Ragan said. On the other hand, Jason Brown, president of Alexis Investment Partners, says his firm is looking to increase its exposure to technology after taking on some of that risk. “We are buying technology at every successive dip we’ve had over the past three months. … We have added to a variety of things, but we have absolutely made sure that big tech is an important part of that. It has been disproportionately targeted. The upward trends are still very intact from our perspective,” Brown said. His Alexis Practical ETF (LEXI) has risen about 15% for the year.

Login to comment

* Rough, sarcastic and ironic language is not allowed. For such Admins Delete without notice.

Leave a Reply

Comments:

Leave a comment

Varchev Absolute Trader

борсова платформа

  • Търгувай над 3000 финансови инструмента: Crypto, Форекс, Акции, Индекси, Суровини, ETF-и
  • Използвай платформа с директно изпращане ордерите на борсите
  • Best Trading Platform - "Online Personal Wealth Awards" EU награждава Varchev Absolute Trader
  • Cloud base платформа - твоят трейдинг сетъп на всяко устройство
  • Traders Talk - чуй какво движи пазарите в реално време
  • Market Sentiment - търгувай с настроенията на инвестиционите банки
  • Top movers - най-горещите трейдове във всеки един момент
  • Stocks scanner - филтрирай най-подходящите за твоя трейдинг стил пазарни инструменти
  • Heat map - Търгувай в посоката на големите играчи


Read more:
RECCOMEND WAS THIS POST USEFUL FOR YOU?
If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information.
Varchev Finance
chat with dealer
CALL NOW
?>