Tipping Over

At height of the great tech stock bubble in 2000 (record US stock valuations), the market cap of five highest valued tech companies was slightly over $2 Trillion..... Today, the combined market cap of AAPL, AMZN, GOOGL, MSFT & FB is $3.96 trillion or nearly 2x..... In 2000, the top five were MSFT, CSCO, INTC, ORCL & NOK. CSCO had the highest P/E (120, or 100 points lower than AMZN today). Over next 2 yrs, stock declines ranged from -62% to -90%. Nortel just missed the top 5 cut. It’s stock lost 99%.
— Fred Hickey, The High Tech Strategist

While certain tech stocks continue to surge higher and prop up the broader market averages, outside of the United States, stock markets have already started to gently roll over, without much fanfare or notice from the public. The MSCI World (ex USA) Index has dipped and held below its 30-week MA. Emerging market stocks, particularly in China, also continue to trend lower. It is a dangerous time for equity investors but few seem concerned to date.

 
 

I cut the equity allocation from 30% to 0% in the Active Asset Allocator in March and continue to wait for low-risk opportunities to add back risk exposure. 

At Secure Investments, I advise individual clients on their pension and non-pension fund investment portfolios. To learn more about my Active Asset Allocator and Gold Trader  investment strategies, please get in touch at brian@secureinvestments.ie or 086 821 5911. If you are reading this via LinkedIn, why not visit Secure Investments and subscribe to get exclusive content for free. No spam, ever. Just great stuff.

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