Perhaps one of the most surprising elements of this recent stock market rebound has been the incredible leadership large-cap blue-chip tech stocks have provided investors who have stayed with these investments through the recent market turmoil we have experienced. The question many investors have today is whether this stock price outperformance by tech giants will continue indefinitely, or if this long-term trend could be cut short if investor expectations change.
It does appear, at least at the broader macroeconomic level, that the North American economy has shifted toward technology at a rapid rate, away from industrial/manufacturing as was the case throughout history. Many economists have pointed to this shift as another industrial revolution, and given technology’s increasing importance in generating new jobs, I would expect to see this outperformance continue as manufacturing jobs increasingly get shipped overseas.
The reality that the NASDAQ exchange has hit new all-time highs of late, fully rebounding from the March lows we saw in the stock market should be of no surprise to investors. As investors continue to shift their focus away from near-term concerns (we are all innately optimists) toward a brighter long-term future, technology stocks should continue to outperform due largely to the optimism they provide.
For these worried about their personal finances and portfolios during this time, staying positive and investing alongside the market appears to be the safest way to go right now.
Invest wisely, my friends.
