Tech is taking over our lives, and our 401(k) accounts
As technology takes over more of people's daily lives, it's also taking over ever-bigger chunks of their retirement accounts.
Surging prices for technology stocks around the world mean the industry is making up a larger proportion of global markets. In
As a result, investing in many stock funds has increasingly become a bet on technology companies. That could be reassuring for investors given how tech companies have been able to deliver big profit growth for years, even when global economic growth was only middling. But it's also a concern for skeptics who see tech stocks as overly pricey and primed for a pullback. The worries came into starker relief in recent weeks, after tech stocks tumbled more than the rest of the market.
To see how the tech takeover is changing investing, consider mutual funds and exchange-traded funds that focus on stocks from emerging markets. These kinds of funds offer access to growth in
A decade ago, these funds were dominated by hulking telecoms, energy companies and the commodity producers that feasted on fast growth in construction and factory activity. They included
In late 2007, technology companies made up less than 11 percent of Vanguard's Emerging Markets Stock Index fund. But in the ensuing years, tech companies like
Now the Vanguard fund, which is the largest emerging-market stock fund by assets, has almost twice as much of its portfolio apportioned to technology stocks. Its biggest single holding is
"It's a sign of the times," said
The shift toward technology stocks and away from old-economy companies is a result of the rise of emerging markets' middle classes, which are increasingly going online and also benefiting from the world's voracious demand for technology, she said.
Ribeiro has 33 percent of her Emerging Markets fund invested in technology stocks, more than any other sector. Some of her recent acquisitions include Momo, a Chinese dating app, and
In
Analysts attribute the drop in tech stocks — nearly 4 percent in a little more than a week — to investors looking for reasons to sell and take profits.
But technology companies are in the midst of reshaping several industries, from retail to media, and proponents see even more growth ahead.
Many mutual-fund managers seem to agree. After looking at 495 mutual funds that invest
The margin has been shrinking a bit recently, but the preference nevertheless remains.
A big difference between tech stocks of today and the last time the industry was such a dominant force in the market during the late 1990s is how much profit they're making.
Tech companies are not only making money, they're delivering some of the strongest gains as customers continue to snap up iPhones and click on ads in
That's a far cry from 2000, when tech stocks made up nearly 35 percent of the S&P 500 at the height of the dot-com bubble and investors were more interested in capturing "eyeballs" and web traffic than in something as mundane as sales or even earnings.
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