Tech stocks had a hard time in 2018. The technology-heavy Nasdaq index fell 3.9% in the previous year – the worst performance in nearly a decade.
Above all, the popular FANG stocks (Facebook, Amazon, Netflix, Google aka Alphabet) came under heavy weight at the end of the year. Tech stocks had a significant impact on the stock market boom over the last 9 years. So, of course, many investors are wondering if consolidation will continue in 2019, or if current prices are a good starting point?
Tech Stocks 2019 – an outlook
High-growth tech stocks have generally outperformed the overall market in recent years. Investors must note, however, in these investments, that even tech stocks in a stock market consolidation usually fall more than the rest of the market.
One of the reasons for this is that tech stocks are often valued higher and usually pay no or only a small dividend. Technology companies need capital to continue investing in innovation to stay competitive in the future.
Netflix – ready for a recovery?
The best example here is Netflix , which has nearly tripled since the beginning of 2016 until today. However, the Netflix share has corrected by nearly 40% from its record high in the summer of 2018 to the end of the year. ...CONTINUE READING