Have you recently thought about investing in this market? Chances are if you have made an investment in stocks after COVID caused stocks to nosedive, you would have made a significant return especially on tech stocks. But are tech stocks still a good investment now?
Depending on what type of investor you are, is what determines the answer. Technology Companies are the future of America and where we will continually see steady growth. Long-term prospects show stocks such as Amazon and Apple consistently growing over time as people continually get acclimated to technology and shopping online. If you are looking for stocks that have a strong outlook in 30 years, look to tech stocks as a way to grow your portfolio. As a value investor which is something that made Warren Buffet popular, technology stocks are not the right investment for you. Some of these tech companies have went up 3 to 4 times of their value and have PE ratios (Which tells us the stock price/ actual earnings) that skyrocketed past what would be considered a good buy. Many tech companies have went up so much that the value of growth has already been priced in. Consider another popular stock Tesla. Many Financial Analysts cannot understand how the value of this stock is so inflated, but yet the stock seems to keep going up. The most recent P/E ratio for Tesla is 1273. To give you an idea of how high that is, the S&P 500 stocks have historically been anywhere between 13 & 15. Warren Buffett probably cringes at the thought of investing in the stock as do many other financial analysts. Many others believe that the best is yet to come for them.
When looking into a stock there are many important things to consider. Investing goals and strategies determine what the right investments for you are. The important thing to remember is that price is solely based on how investors are feeling at a particular time about a set of specific investments. Knowing that feeling and emotion can change at any given time, drastic price changes can happen that will affect your stocks.