Stocks hit fresh all-time highs this past week, and although technology wasn’t the top-performer in recent days, we didn’t exactly see it break down either.
If you’ve been reading the Sector Leader Bullseye newsletter long enough, you’ll understand that sector rotation is the life blood of bull markets.
Yes, we want to see the tech sector lead, and we have. It’s why we’ve been dubbing it the Great Tech Reset. But there’s a legitimate question as to whether this bull market sustain itself without tech leading week in and week out.
Every Important Stock Is Tech-Related Right Now
Let’s just be realistic for a moment. Virtually every company out there with the greatest potential for growth has some connection to tech. Clothing company? Uses AI to help make their online sales more efficient. Energy company? Using AI and other software to be more efficient with their oil production.
You get the idea.
It’s all about productivity gains, really. And if we think about it, the last time we had a major technological advancement that boosted economic productivity was in the 1990s during the dotcom bubble.
The mantra for surviving financial markets is adapt or die. It’s not nice, kind, or fluffy, but it’s reality.
We’re still seeing industrials as the best-performing sector year-to-date. But the catch here is that a lot of names are tied to tech - drones, robotics, automation - you name it.
I’ve found over the years to just keep things simple. If a theme is working, keep using it. Eventually, the music will stop, but our risk management strategies can be relied upon to protect us then.
Talk soon,
Gianni