Why tech will continue to fall while boring banks and miners are charging

Is it just me or are people forgetting the playbook? The conversations that I hear in lifts, on the street, in coffee shops...is scary. People are forgetting the basics. Basically, investors are forgetting;

  • Long-term interest rates (bonds) and prices (inflation) usually rise after a recession and rapid growth- that’s exactly what we are seeing now
  • And some are forgetting that we saw our quickest recovery out of our 1st recession in 29 years
  • So, inflation (oil and petrol prices) and long-term interest rates are rising because of this. This is VERY common in this phase of our recovery. And…is exactly why tech stocks have plunged and why money is chasing banking and mining stocks
So, it’s seriously time to start to consider reducing/taking some tech profits and consider investing in ‘boring’ banks and shiny mining stocks.

Fund managers and ‘smart money’ are doing just this. So unless you adapt, you could miss out on returns.

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Market Strategist
Saxo Bank

Jessica Amir is a Market Strategist at Saxo Bank. She has over 14 years of experience in equities, has worked as a financial adviser and television reporter; interviewing politicians, Prime Ministers and Australian Treasurers.

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