With the holidays almost upon us, it is good to see what sectors were up and what was down. In an article by Matt Phillips of the New York Times News Service, if you think back to December 2018 did you want to put more money in big tech stocks?
If you did, you made money. There were valid reasons if you did not – the President loves tariffs and you might have been concerned about the effect of tariffs on China. It turns out the tariffs had an effect, but not to the degree it was expect to have. A year ago, Apple’s sales of the iphone was down because of the China situation. Facebook was being grilled by Senators in Washington. Amazon’s founder Jeff Bezos and the President were fighting because Mr. Bezos owns through a personal company owns the Washington Post and it is not always flattering to the President. There were many reasons to seek alternatives.
If you overlooked the concerns and bought the FANG stocks, Apple’s stock is up 70%, Alphabet is up 28%, Microsoft is up 49%, Amazon is up 16% and Facebook is up 53%.
Tech companies have benefited from the Fed keeping rates low and cuts to rates. The China tariff concerns are manageable. The rise in the the stock prices have reflected in 20% of the rise of the S&P 500.
Linking to dividend paying stocks, sometimes holding the correct stocks is the key to success on the stock market. Often times dividend share buyers buy for conservative reasons, but when the windows of government help the markets, those stocks can act similar to growth stocks and everyone has a good year for different reasons. Sticking to your what you know can make you money because profitable stocks which can pay dividends are valuable in any market.
There are more questions than answers, till the next time – to raising questions.