hi John,
here's a good discussion of the conundrum a lot of tech investors seem to find themselves in.
interactive.wsj.com
"Suppose you're down 75%," says Jerry Tweddell, an investment adviser in Sonora, Calif. "Just to get back to even, it might take two decades of moderate stock-market returns. You'll have to double your money and then double it again."
What to do? For many folks, the temptation is to stick with their battered technology holdings, hoping they will snap back. This isn't an unreasonable hope. Technology shares have high "betas," which means they tend to lose more than most stocks in a market decline, but they should outperform in bull markets.
The problem is, the previous bull market's heroes are often left behind when stock prices revive. Indeed, technology issues took years to recover from the early 1980s tech-stock frenzy. "The next bull market will probably be led by companies you and I have never heard of," Mr. Tweddell predicts.
Technology now accounts for about a fifth of the Standard & Poor's 500-stock index. If you have more than 20% of your stock portfolio in technology, "you've got to cut your weighting," argues Honolulu investment adviser Harry Kasanow. "Investors will be disappointed if they wait for tech to come back." |
