Check the background of this financial professional on FINRA's BrokerCheck.
   

Newsletters


The eNewsletter articles on this page provide valuable information on timely and interesting financial issues across a variety of subject areas, including retirement, investments, personal finance, annuities, insurance, taxes, college, and government benefits.


The Tech Sector Could Be Dominating Your Portfolio
Infographic: Financial Lessons from Football
Ten Year-End Tax Tips for 2018
How can I protect my personal and financial information from credit fraud and identity theft?
How can I safely shop online this holiday season?


SIGN UP NOW
Enter your name and e-mail to receive e-mail updates from me.
NAME:
E-MAIL:


 
 

The Tech Sector Could Be Dominating Your Portfolio

The biggest names in technology powered stock market gains and bouts of volatility in 2017, and the trend continued into 2018. The S&P Information Technology sector index posted a 13.19% total return from January through July 2018, compared with 6.47% for the broader S&P 500 index.1

Wall Street analysts and the business media often refer to well-known technology companies Facebook, Apple, Amazon, Netflix, and Google (now officially Alphabet) collectively with the acronym FAANG. Others use FAAMG, which substitutes Microsoft for Netflix. Apple, Microsoft, Amazon, and Facebook, respectively, are the four most valuable companies by market capitalization in the S&P 500 index; Alphabet is ranked eighth and ninth (based on two different share classes).2

These tech giants are household names because they already play a huge role in everyday life, but they are also bold innovators with lots of cash on hand. They aim to expand their influence further by developing new products (such as self-driving cars and virtual reality) and disrupting established industries.3

The problem with popularity

Many benchmark indexes are weighted by market capitalization (the value of a company's outstanding shares), which gives larger companies an outsized role in index performance. The same large-cap tech stocks dominate the index mutual funds and exchange-traded funds (ETFs) that track these indexes, and can also be found among the largest holdings of many actively managed funds.

Spreading investments among the 11 different sectors is a common way to diversify stock holdings. However, investors holding a mix of different funds for the sake of diversification could be surprised by the heavy concentration of popular technology stocks if they eventually fall out of favor and prices fall.

Asset allocation and diversification are methods used to help manage risk; they do not guarantee a profit or protect against investment loss.

Mind your sector exposure

Over time, a core portfolio of diversified equity funds can become overweighted in a sector that has been outperforming the broader market. Some investors with large positions in technology stocks may not be aware of the concentration level in their portfolios. Others could be ignoring the risk, possibly because they are overly optimistic about the sector's future prospects.

Each business cycle is unique, which makes it difficult to predict which sectors stand to benefit in the months ahead. Although there's little you can do about the returns delivered by the financial markets, you can control the composition of your portfolio. For this reason, you may want to review the sector allocation and risk profile of your investment portfolio, if you have not done so lately.

All investments are subject to market fluctuation, risk, and loss of principal. Shares, when sold, may be worth more or less than their original cost. Investments seeking to achieve a higher return may involve greater risk. Sector funds tend to be more volatile than the market in general and may carry additional risks.

Mutual funds and ETFs are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

1–2 S&P Dow Jones Indices, 2018
3 The Economist, June 2, 2018
 
©2018 Broadridge Investor Communication Solutions, Inc. All rights reserved.
Connect with us on: Go to Facebook  


 
 
 

Contact Us

Reynolds Financial Group LLC

216 Chaucer Drive, Irwin PA, 15642

Phone: (724) 863-5005

Fax: (724) 863-8031


wendyl@reynoldsfinancialgroup.net
 

Key Numbers for 2018

Click on the thumbnail for FREE DOWNLOAD



For Detailed 2018 Key Numbers Click HERE
 

We Are a BBB Accredited Business

 BBB® A+ Rating

On a scale of A+ to F
Reason for Rating
BBB Ratings System Overview

No Rendering of Advice
Reynolds Financial Group, LLC is a Registered Investment Advisory Firm registered in the state of Pennsylvania. Reynolds Financial Group, LLC provides asset management and related services for clients nationally. Reynolds Financial Group, LLC will file and maintain all applicable licenses as required by the state securities regulators and/or the Securities and Exchange Commission ("SEC"), as applicable. Reynolds Financial Group, LLC renders individualized responses to persons in a particular state only after complying with the state's regulatory requirements, or pursuant to an applicable state exemption or exclusion.

This website is intended to provide general information about Reynolds Financial Group, LLC. It is not intended to offer investment advice. Information regarding investment products and services are provided solely to include information about our investment philosophy, our strategies and to be able to contact us for further information. Presentation of the information via the Internet is not intended to create, and receipt does not constitute, a client relationship. Internet subscribers, users and online readers are advised not to act upon this information without seeking the service of a professional accountant, attorney and/or financial advisor.

Any U.S. federal tax advice contained in this website is not intended to be used for the purpose of avoiding penalties under U.S. federal tax law. Clients should seek the advice of an accountant or Certified Public Accountant (CPA).

Accuracy of Information
While we use reasonable efforts to furnish accurate and up-to-date information, we do not warrant that any information contained in or made available through this website is accurate, complete, reliable, current or error-free.

We assume no liability or responsibility for any errors or omissions in the content of this website or such other materials or communications.

Disclaimer of Warranties and Limitations of Liability
This website is provided on an "as is" and "as available" basis. Use of this website is at your own risk. We and our suppliers disclaim all warranties. Neither we nor our suppliers shall be liable for any damages of any kind with the use of this website.

Links to Third Party Websites
For your convenience, this website may contain hyperlinks to websites and servers maintained by third parties. We do not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.

Charities Links: Although Reynolds Financial Group, LLC contributes to the support of the charities listed on this website, they are not affiliated with them.  Their listing does not constitute or imply their endorsement of Reynolds Financial Group, LLC or its services.

This communication is strictly intended for individuals residing in the state(s) of FL, MD, PA and VA. No offers may be made or accepted from any resident outside the specific states referenced.
 


Check the background of this financial professional on FINRA's BrokerCheck.