As a result of stark valuation increases and significant gains, big tech stocks have soared throughout the year. Despite their strong performances, however, many investors are looking to diversify away from this long-time successful sector.
Because of their long-term gains, investors are skeptical about the likelihood that tech stocks can continue to embark on their rampant rise. There is a large concern that if tech stocks suffer an unanticipated setback, they could largely damage the S&P 500 – an index that they have largely floated for over a decade.
Garret Melson, a portfolio strategist at Natixis Investment Managers Solutions, believes that as investors’ skepticism grows, their withdrawal from big tech investments could largely damage such stocks. Furthermore, the portfolio strategist believes that it is prudent to consider investing in financial and energy companies, which he believes will benefit from rising inflation and the ongoing post-pandemic economic recovery.
“We’re in the camp that the growth rate in the economy is being under-appreciated this year and next year,” Melson further claimed.
Currently, there is much optimism surrounding the recovery of the U.S. economy. In addition to rising job creation figures, there is also the development of an experimental antiviral drug from Pfizer that could assist in enabling employees to resume their regular work lives.
