E-Crypto News Talks to Tech Executives on Why Tech Stocks are Rising

Is there a Tech bubble in 2020?

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Tech stocks have been rising this year. This has led many to believe that we are currently in a Tech bubble in 2020. E-Crypto News reached out to experts in the area. Here is what they had to say.

Daniel Lugasi

Daniel Lugasi Portfolio Manager at VL Capital Management

Growth stocks, particularly technology stocks, have outperformed the broader stock market since the lows in March. The general consensus is that large-cap technology stocks are most insulated from the coronavirus pandemic because most do not have direct exposure compared to retailers, for example.

This shift has propelled technology stocks to all-time highs and has left valuations stretched on a historical basis. Price action in certain stocks, such as Tesla, points towards a potential market bubble. The FAANG stocks have also contributed to leading the NASDAQ to all-time highs.

We believe that certain technology companies that do not have high exposure to advertising revenue, namely Apple and Amazon, can continue higher. Companies such as Facebook and Google could see more difficulty as large corporations slash advertising budgets, which will not bode well for these specific technology companies.

Craig Kirsner MBA

Craig Kirsner MBA Nationally-Recognized Author, Speaker & President, licensed for 27 years at Stuart Estate Planning Wealth Advisors

“Politicians and Jerome Powell at the Federal Reserve can take 100% credit for the current stock market being as high as it is.

We’ve been in a giant stock market and real estate bubble for over a decade that I called the Central Banker’s Bubble in my Kiplinger article, and that team of politicians successfully reinflated the bubble with their multi-Trillion dollar bailouts and near-zero percent interest rates.

The government has done unprecedented things since the COVID virus scare that I don’t think will end well for our country in the long-run. Short-term they did “reinflate” the bubble and save us from a current economic depression, pushing that off for another day.

The stocks that have benefited the most from the current stock market bubble are definitely tech stocks.

The 7 major stocks that have largely been part of the markets move higher: Apple, Microsoft, Amazon, Facebook, Google, Tesla, and Netflix. These stocks are the current darlings of Wall Street and we are keeping a very close eye on these stocks. As long as they remain technically strong, the general market should continue to see higher highs. But when these bellwether stocks begin to technically falter…. watch out below.

I believe we are due for a correction in tech in the short-term as they are quite overbought”.

About Craig Kirsner

Craig Kirsner MBA is a nationally-recognized Author, Speaker, and Fiduciary Retirement Planner, whom you may have seen on Forbes, Kiplinger, Fortune, Fidelity.com, AT&T, Nasdaq.com, US News & World Report, Readers Digest, Wealth365, MSN Money, FoxBusiness, Bankrate.com, Yahoo Finance, Newsmax, and others.

Craig is the author of Retire With Confidence: Preserve and Protect Your Wealth And Leave A Legacy and the creator of the Preserve and Protect Retirement System.

He has undergraduate degrees in finance and risk management from the University of Florida, as well as an MBA in finance from the Chapman School of Business at Florida International University. He has passed the Series 63 and 65 securities exams and has been a licensed life insurance agent for 27 years.

 

 

David Russell, VP Market Intelligence at TradeStation

Why are tech stocks rising in 2020?
Technology stocks were running before coronavirus because of growth in cloud computing and e-commerce. The pandemic only increased demand for those services and made tailwinds even stronger. It also pushed interest rates lower, which can make it easier for investors to pay high multiples for technology stocks.

– When the rest of the market is lagging tech stocks are leading. What’s your opinion on this?
Technology is now more important than ever. It’s gotten so large as a sector that the biggest companies in Consumer Discretionary and Communications are technology stocks (Amazon.com, Alphabet, and Facebook).

This is a new era for the economy and the stock market where technology is the main driver of growth. The rest of the market is lagging because many non-technology companies are no longer driving profit growth in this country – even if they still account for most of the jobs.

– Will tech stocks continue to rise in 2020?

Investors shouldn’t take anything for granted – especially in times like this. Even if coronavirus lifted technology stocks, more recently we’ve seen a shift toward global stocks and precious metals.

The weak U.S. economy is causing the dollar to have its worst month in about nine years. Investors are responding by moving into emerging markets, gold miners, European stocks, Chinese stocks, and materials. Many of these have been ignored for years. Investors may take some profits in tech stocks and look for opportunities in long-forgotten global stocks.

Many of the tech stocks have risen because they can work with remote access and are needed. Such companies were in demand before the pandemic and remain in demand and are even more necessary now.

The big question is, can these companies work remotely in the long run in this type of new and unusual economy. But, we must not forget that some tech stocks have gone down.

My big concern is whether a big general market correction as we’ve seen in the past will reoccur. If so, when?  If there is a big general market correction, I suspect the tech stocks will come back the quickest in this type of economy.

Part of the reason for the rise in some tech stocks is due, in part, to the federal reserve pumping trillions of dollars into the system. The real question is, will this continue and if it does, how will this impact both the market and our nation long term?

There are a lot of questions and a lot of different answers. Everyone has an opinion. Those with the right answers who make investment decisions based on them may be the big winners.

Fred Schebesta  Fred is a global business leader, co-founder of global personal finance comparison website Finder.com (which includes Crypto Finder) and cryptocurrency brokerage HiveEx.com.

Tech stocks are rising because it’s the one key part of our world that is relied on while we’re in lockdown. As a business, Finder’s entire workforce of about 500 people around the world is working remotely. We rely heavily on the tech of many pieces of software, applications, and hardware to keep our business running.

Sean Worthington,  Founder, and CEO of Cloudcoin

“We’re seeing so much innovation happening in every industry and it’s largely coming from technology that is enabling agile change. Tech stocks will continue to rise and outpace many other industries as the world moves into a new way of survival.”

1. Is there a tech stock bubble?

With tech stocks valued in dollars, it is unclear if a bubble exists or not. When people see the value of an asset like Tech Stocks go up, they logically want to invest money in that asset. They are getting a “buy” signal. However, people may be making a logical mistake. The price may be going up because of substantial dollar printing and not because of the productivity of the investment. This is how Monetary systems can fool us into making bad decisions. CloudCoin has a fixed amount that never increases or decreases so that bubbles do not happen.

2. Why are tech stocks rising in 2020?

Usually, it is the price of houses that inflates into bubbles because banks like making home loans and banks get all the new money. But today, tech companies themselves are getting billions of dollars from the Coronavirus relief payments. Investors naturally like tech stocks because they actually create new technology that has the potential to have huge returns on investment. The question is: can the tech stocks perform. I think the answer is yes. The tech sector has been starved of investment for decades and now the time has come for it to shine. But, they may shine too bright if don’t watch out.

3. When the rest of the market is lagging tech stocks are leading, will tech stocks continue to rise in 2020?

I think yes. Tech stocks have been under funded for the decades. A dollar spent in tech is much more likely to yield returns, especially in the current economy with large amounts of Corona Virus Relief dollars causing assets to appreciate due to monetary inflation.

4. Why will this happen?

Tech has been successful recently and that will continue to bring in investors – until it becomes clear that tech is over invested. With the massive Coronavirus relief payments, problems in Tech Stocks are masked. You can make a lot of money. Just remember the greater fool. Don’t be greedy. Find a greater fool to sell to before it crashes.

Jeffery M. Leving, President Jeffery M. Leving Ltd.

Many of the tech stocks have risen because they can work with remote access and are needed. Such companies were in demand before the pandemic and remain in demand and are even more necessary now. The big question is, can these companies work remotely in the long run in this type of new and unusual economy. But, we must not forget that some tech stocks have gone down.

My big concern, is whether a big general market correction as we’ve seen in the past will reoccur. If so, when?  If there is a big general market correction, I suspect the tech stocks will come back the quickest in this type of economy.

Part of the reason for the rise in some tech stocks is due, in part, to the federal reserve pumping trillions of dollars into the system. The real question is, will this continue and if it does, how will this impact both the market and our nation long term?

There are a lot of questions and a lot of different answers. Everyone has an opinion. Those with the right answers who make investment decisions based on them may be the big winners.

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