Inflows into
technology-focused funds have lasted for 12 straight weeks and surpassed $20bn.
The US's Faang (Facebook, Amazon, Apple, Netflix and Google) and the China's
Bats (Baidu, Alibaba and Tencent) have dominated the rally in the global stock
market, despite Tencent has dropped around 7% this year; in addition, the New
York Stock Exchange's Fang+ index has increased more than 32 per cent this
year. The Nasdaq Index is outperforming S&P500 and the Nasdaq Index has
more weights on the tech companies. Tech companies seem very amazing and
attractive.
Of course, investors
are attracted to these tech stocks because of their amazing performances.
Meanwhile, because of the investors' favour, stock prices are pushed higher by
the continuing inflows of investment. Besides the profits generated by these
well-performing stocks, investors could have other reasons about their
decisions to invest in these tech companies. Firstly, investors are worried
about the current global trading environment. Because of the hostile in the
global trading environment, investors are worried about the companies they
invest in are affected by the hostile environment; however, these tech
companies seem less affected by the environment because they already grow
powerful and dominating. Secondly, many people believe we are entering the era
of AI and these tech companies are the leaders in this field and investors want
to join this party. Thirdly, investors need to choose where they put money. The
interest rates around the world are relatively low, though the US Fed has
increased the base rates several times and other central banks have similar
plans. Tech companies are the best options for these investors and it seems
there are no other better alternatives. Money needs somewhere to place it.
To conclude, tech
companies are almost the best investors can have in their portfolios,
especially if they can't choose a lot.
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