The Technology Growth stocks seem to be highly correlated. When one is down, they generally all down, similar to when one is up, they all up (not that that’s been the case too often)
As a swing trader, is it therefore more risky to hold two to three tech stocks at the same time as you can take a bit of a beating in quick time? Seems safer to hold one only or not trade them at all at the moment!
Yes! This so so true, and I do NOT like taking a beating. If you are not comfortable holding value stocks it may be best to wait this out.
We must observe and listen to the markets. Right now the large institutions are selling high valuation growth stocks. We need to stay out of their way until there is a sign of stabilization. I see no buyers yet. But, they will over-correct to the downside and there will be opportunities there. I would do nothing in this area right now.
Conversely, The large institutions are buying "value" stocks with earnings and low valuations. We can see consumer staples, energy, financials and commodity stocks being bought this week. The financial stocks are also being bought due to the anticipated interest rate hikes. I believe the buying in these stocks will be overdone as well. We are seeing consumer staple stocks like Proctor & Gamble and General Mills trading like software names. This is out of character for them. These companies have no growth and pay a decent dividend. They are acting like bonds to investors as they get a dividend yield and perhaps some appreciation.
I hope this answers your question!
Hang in there as better days are ahead. The bear market in software/tech will not last forever!
Never Give Up!