Some interesting thoughts Trudy and Carlo, not all that I agree with as you might expect.
Right now, due to the obvious, we are seeing something akin to when the tech funds were riding the bubble. From historical reference I would expect the price corrections to be brutal over the coming years.
True, the American stock market has been doing very well, mostly thanks to these technology companies. But people have already realised this and jumped on the bandwagon, pushing share prices up.
If it’s a buy and hold investment you are looking for then you could do a lot worse than just put your money in to Amazon stock; a Goliath right now for sure which will be a bigger one in years to come.
Growths not dividends are probably more appropriate for those in the earlier stages of their investment career; or even for those who missed out on the earlier recovery.
Not wishing to teach granny to suck eggs, but newbies should be aware that the FTSE100 famously has little to do with the UK economy simply because the largest companies in the index are huge multinationals doing most of their business outside the UK.
Taking the top five of these by way of example, if you look at the likes of AstraZeneca, GlaxoSK, Diageo, BAT and HSBC you will clearly see that they fit this profile. Out of these five if you take an even closer look at Astra Zeneca’s sales into the whole of Europe last year you will see that they were only 18% of their total sales, so you really need to ask the question how much does what is going on in the UK really affect them?
Moving back across the Atlantic, there is a great deal of discussion surrounding the ever volatile Tesla stock. As much as I admire (and even wonder on occasion) at Elon Musk’s intelligence, vision, drive, ingenuity and sheer bloody mindedness to meet project completions, there in the back of my mind is always a big question surrounding the economics of his entrepreneurship(perhaps more so with Tesla than with SpaceX) .
If you take a closer look at Tesla’s financials you will see lots of sales of credits and ongoing large losses on real sales. The Tesla valuation, in my honest opinion, makes the dot com bubble of the late 90’s look relatively sane, and with numerous competition biting hard into its sales Tesla will never justify today’s valuation. There, I’ve said my piece on that.
So yes, you should be very worried about the amount of Tesla exposure you have if that’s where you’ve been putting your faith/money.
Moving on, I recommend diversification and balance as the keys to success in these time and would be very concerned to find that any fund manager has more than 10% of their portfolio in a single stock. See the recent issues with Wirecard and Grenke as examples of what can go wrong in an over weighted portfolio.
As for fast growing British technology stocks, some of the following may be worth a look: Blackbird, IMIMobile, EagleEye, D4T4, Solid State, Codemasters, Team 17, Sumo, Frontier Developments, and Bidstack. I, quite deliberately, haven’t pointed a finger at my choice here and which ones to avoid (as there sure a couple!) that is for you dear investor to workout with your own due diligence.
On a final note, for now, the shrewd/brave (?) investors will have looked to the East a few months ago as today we see in very recent reports that the CSI 300 index ( the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange ) has now risen above $10 trillion. No mean achievement, as this 27% 2020 YTD rise has seriously outpaced the relative frugal 8% 2020 YTD seen in the rest of the world’s markets.
In tandem with this emergence, some might read something more sinister in the PRC’s involvement and response to the pandemic which has strengthened its position as one of the leading global economies.
From an investor’s point of view again from a purely personal perspective, my concerns in investing in China, or indeed any emerging markets, is the associated high risk due to a lack of transparency not only in terms of accounting but also who ( especially in the CCP ) makes the final impacting decisions!
