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Can a Growth Scare Benefit Tech Stocks?

By Advisor Perspectives
Financial Services

Given the recent volatility, investors may be wary of tech. Not so fast, Russ explains.

Despite an abrupt and punishing market swoon that disproportionately punished more volatile sectors, technology is holding its own. During the past month the sector has outperformed by roughly 100 basis points (bps, or one percentage point). Even with the prospect for more volatility, investors may want to consider adding to rather than abandoning the sector.

In June I highlighted why a regime of slow economic growth actually favors growth stocks over value. During the past three months, the Russell 1000 Growth Index has outperformed the Value Index by approximately 200 bps. Going forward, economic growth is likely to continue decelerating. This suggests a regime still favorable to growth and its largest constituent: technology.

Read more at Advisor Perspectives.

Photo: Iohit V

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