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Tom Limoges

June 20 , 2017

Bo Knows Investing, Do You?


Growing up, like most boys my age, I had an extensive collection of football cards.  Some of the highlights of my collection were several rookie cards of Hall of Famers; John Elway, Joe Montana, and Bo Jackson – Bo knew Football, baseball, and a variety of other sports.  I sifted through hundreds of packs of common cards to locate these gems.  Looking back on all the money “I” (my parents and grandparents) spent on my card collection investment, I am having some buyer’s remorse.  Perhaps a mutual fund, 30 year Treasury bond, or some Exxon stock would have proved a better choice? 

Investors who purchased technology stocks a week ago likely had that same feeling as US equity markets continued to reach new highs last week without the help from the technology sector. After hitting a record close on June 8th, technology stocks declined to their lowest level in a month. This happened because of concerns over valuation.  Analysts also cited certain investment strategies that contributed to an environment of compliancy in which stock prices of technology companies got ahead of expectations.  This means that the tech stocks were overvalued.  For many investors, this recent dose of volatility has created the need to evaluate the role technology stocks play in their portfolio.  

Returns for the S&P 500 Index have become focused in a small group of stocks.  The technology sector makes up almost a quarter of the index – the heaviest weighting since the technology bubble.  The largest technology stocks in the index are Apple, Google, Amazon, Microsoft, and Facebook.  These accounted for nearly 13% of the index and over 40% of the 2017 return through the end of May.  Even though the recent decline in prices decreased their value, technology stocks are still the top performing category this year and should remain part of a well diversified portfolio.     

Keeping portfolios diversified remains one of the best defenses to market volatility. Investments managed by Security National Bank remain well diversified.  In addition to stock sector selection, our portfolios are also diversified in investment style (large vs. small cap, domestic vs. international, etc…).  This strategy is effective at providing consistent returns and reducing volatility over time.      

If you are unsure of how your overall investments are allocated, or have buyer’s remorse from an outside investment purchase, please contact your Security National Bank Wealth Management Advisor.  We have the tools and the expertise to review your entire investment mix, whether they are held entirely at SNB or partially with an outside source.

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