[ad_1]<div _ngcontent-c14 = "" innerhtml = "
Getty
On January 1, 2018, I made my boldest prediction of the year: bitcoin was going to crash.
There are many reasons why bitcoin has cost investors a lot of money: it's inefficient; he is not private; and glitch and hacking cause bitcoin loss. But the main reason is this: stupid money followed smart money and ended up holding the bag.
I've seen this story play many times, which is why I urge you to be contrarian and avoid the pitfalls that market manipulators put up with, whether they were titles with dot-com technology at the end of the years. " 90, of housing in the mid-2000s or fancy Internet money in 2010.
The other side of this coin is the reason why I'm pushing you to do a simple thing in 2019: jump on technology titles. And if you want dividends, do not worry. I have 2 funds that offer 6.3% and 9.3% of payments to choose from.
I'll show you both (and I'll reveal what I see as the best buy now) a little bit further.
My prediction number 1 for 2019
If there's anything you can count on, it's the ability of technology companies to print money, because the whole world is embracing technology to communicate, interact, exchange, learn and buy new products.
The proof is in numbers: while technology has one of the highest net profit margins of any S & amp; 500, at 22.1%, its profits are actually growing: 100% of IT companies reported higher profits than estimates in the third quarter of 2018.
Quite right: one did not miss it!
However, if you looked at the stocks of FAANG in the last month, you would have had a very different impression. On average, these companies are falling massively, due in large part to the 14.5% drop from Apple-only with Facebook slightly above the water (but it is still abruptly for the year).
Zoom out a little, however, and the picture is much brighter. FAANG stocks are still up two digits, on average, in a year when the S & amp; P 500 is down.
I would not be surprised if this news surprised you. The financial press has beaten the technology companies for a lot of reasons: privacy scandals of Facebook and Alphabet, weakening of subscription growth a Netflix, the commercial war for Apple, but the reality is that the technology is still functioning well.
But the market is not rewarding these stocks.
If we look at net cash flows for the Trust Invesco QQQ, we see that $ 1.44 billion has left this technology-focused ETF only in the last three months. Since this is a popular ETF to track the Nasdaq 100, a technology-heavy index, these net outflows show that stupid money is panicking and selling off, the opposite of the setup that caused bitcoin crashes .
If we look at the Select Sector SPDR ETF technology, things seem even better for a contrarian. While hedge funds and institutional investors sometimes buy QQQ, these groups do not use enough XLKs. And this fund saw billions of net outflows for 2018: a total of $ 2.44 billion came out of XLK in the last three months.
The conclusion is clear: stupid money is coming out of technology, which means that there is an opportunity to buy before the pendulum rocks back in the other direction and we see inflows.
The Tech Play
Longtime readers know that one of my favorite ways to play technology is through CEF closed funds)because these funds give you generous dividends while you wait for a raise, and some technology CEFs have shown a serious upside over the years.
But let's look a little closer to four options: the two ETFs I just mentioned (XLK and QQQ) and two CEF contenders.
First of all, let's take a look at the first 10 participations of the XLK. There are a lot of large-cap companies in the portfolio of this ETF – family names that have been beaten recently, but nowhere near as much as some technology stocks with smaller capitalisations.
Likewise, the other ETFs, QQQs, sports stocks concentrated on many technological heavyweights, have some important differences. PepsiCo is Comcast Corp they are not technology companies anywhere in the imagination (and CMCSA is without a doubt one of the companies interrupted by technological innovations), which means that this portfolio does not offer the same technological exposure as XLK. If we want to invest in technology, we should choose XLK on QQQ, but only if we limit ourselves to ETFs.
But I would not do it, because there are two better alternatives: the CEF I mentioned before.
2 CEF Tech which pay up to 9.3% of dividends
I'm talking about the Columbia Seligman Premium Tech Growth Fund, which pays a 9.3% dividend, and the BlackRock Science and Technology Trust, with a regular dividend of 6.3%. I have written about my appreciation of BST many times in the past; is up to two digits from the start of the year, while STK is down 9%.
This does not mean that BST is the best choice now, though. To decide which is the best choice, we need to deepen the holdings of each fund.
Let's start with BST, which recently made an aggressive bet on payment companies. This is one of the reasons why it has been strong lately, since Bitcoin has not succeeded in replacing the payment solutions of the major BST holdings, such as Square is Visa. But this fund also has a lot of exposure to China.
In total, almost 10% of the fund is based in China and focuses on China-oriented companies. This is fundamentally different from STK, which is much more focused in the United States, while it also invests in hardware and payments.
STK's portfolio is the reason why I favored BST throughout 2018: cryptocurrency craze has entailed an intense hardware demand, but the crypto crash also means that demand has faded in 2018.
As a result, chip makers and similar companies have struggled, causing the semiconductor industry (seen below through the ETF by VanEck Vectors) to be connected in 2018.
But now cryptocurrencies are no longer a determining factor for the performance of semiconductor companies, and this is an advantage, not a responsibility. It is also the reason why now is the time to favor STK and put some money in this fund if you are hunting for technical exposure.
The soccer player? Its dividend yield of 9.3% is an attractive flow of income as it expects the market to return to good and up the semiconductor industry to the valuations it deserves.
Disclosure: none
">
On January 1, 2018, I made my boldest forecast of the year: the bitcoin was crashing.
There are many reasons why bitcoin has cost investors a lot of money: it's inefficient; he is not private; and glitch and hacking cause bitcoin loss. But the main reason is this: stupid money followed smart money and ended up holding the bag.
I've seen this story play many times, which is why I urge you to be contrarian and avoid the pitfalls that market manipulators put up with, whether they were titles with dot-com technology at the end of the years. " 90, of housing in the mid-2000s or fancy Internet money in 2010.
The other side of this coin is the reason why I'm pushing you to do a simple thing in 2019: jump on technology titles. And if you want dividends, do not worry. I have 2 funds that offer 6.3% and 9.3% of payments to choose from.
I'll show you both (and I'll reveal what I see as the best buy now) a little bit further.
My prediction number 1 for 2019
If there's anything you can count on, it's the ability of technology companies to print money, because the whole world is embracing technology to communicate, interact, exchange, learn and buy new products.
The proof is in numbers: while technology has one of the highest net profit margins of any S & P 500 sector, at 22.1%, its profits are actually growing: 100% of IT companies reported profits higher than estimates in the third quarter of 2018.
Quite right: one did not miss it!
However, if you looked at the stocks of FAANG in the last month, you would have had a very different impression. On average, these companies are falling massively, due in large part to the 14.5% drop from Apple-only with Facebook slightly above the water (but it is still abruptly for the year).
Zoom out a little, however, and the picture is much brighter. FAANG stocks are still up two digits, on average, in a year when the S & P 500 index is falling.
I would not be surprised if this news surprised you. The financial press has beaten the technology companies for a lot of reasons: privacy scandals of Facebook and Alphabet, weakening of subscription growth a Netflix, the commercial war for Apple, but the reality is that the technology is still functioning well.
But the market is not rewarding these stocks.
If we look at net cash flows for the Trust Invesco QQQ, we see that $ 1.44 billion has left this technology-focused ETF only in the last three months. Since this is a popular ETF to track the Nasdaq 100, a technology-heavy index, these net outflows show that stupid money is panicking and selling off, the opposite of the setup that caused bitcoin crashes .
If we look at the Select Sector SPDR ETF technology, things seem even better for a contrarian. While hedge funds and institutional investors sometimes buy QQQ, these groups do not use enough XLKs. And this fund saw billions of net outflows for 2018: a total of $ 2.44 billion came out of XLK in the last three months.
The conclusion is clear: stupid money is coming out of technology, which means that there is an opportunity to buy before the pendulum rocks back in the other direction and we see inflows.
The Tech Play
Long-time readers know that one of my favorite ways to play technology is through closed-end CEFs, because these funds give you generous dividends while you wait for a hike, and some technology CEFs have shown a serious upside over the years.
But let's look a little closer to four options: the two ETFs I just mentioned (XLK and QQQ) and two CEF contenders.
First of all, let's take a look at the first 10 participations of the XLK. There are a lot of large-cap companies in the portfolio of this ETF – family names that have been beaten recently, but nowhere near as much as some technology stocks with smaller capitalisations.
Likewise, the other ETFs, QQQs, sports stocks concentrated on many technological heavyweights, have some important differences. PepsiCo is Comcast Corp they are not technology companies anywhere in the imagination (and CMCSA is without a doubt one of the companies interrupted by technological innovations), which means that this portfolio does not offer the same technological exposure as XLK. If we want to invest in technology, we should choose XLK on QQQ, but only if we limit ourselves to ETFs.
But I would not do it, because there are two better alternatives: the CEF I mentioned before.
2 CEF Tech which pay up to 9.3% of dividends
I'm talking about the Columbia Seligman Premium Tech Growth Fund, which pays a 9.3% dividend, and the BlackRock Science and Technology Trust, with a regular dividend of 6.3%. I have written about my appreciation of BST many times in the past; is up to two digits from the start of the year, while STK is down 9%.
This does not mean that BST is the best choice now, though. To decide which is the best choice, we need to deepen the holdings of each fund.
Let's start with BST, which recently made an aggressive bet on payment companies. This is one of the reasons why it has been strong lately, since Bitcoin has not succeeded in replacing the payment solutions of the major BST holdings, such as Square is Visa. But this fund also has a lot of exposure to China.
In total, almost 10% of the fund is based in China and focuses on China-oriented companies. This is fundamentally different from STK, which is much more focused in the United States, while it also invests in hardware and payments.
STK's portfolio is the reason why I favored BST throughout 2018: cryptocurrency craze has entailed an intense hardware demand, but the crypto crash also means that demand has faded in 2018.
As a result, chip makers and similar companies have struggled, causing the semiconductor industry (seen below through the ETF by VanEck Vectors) to be connected in 2018.
But now cryptocurrencies are no longer a determining factor for the performance of semiconductor companies, and this is an advantage, not a responsibility. It is also the reason why now is the time to favor STK and put some money in this fund if you are hunting for technical exposure.
The soccer player? Its dividend yield of 9.3% is an attractive flow of income while it expects the market to return to good and up the semiconductor industry to the valuations it deserves.
Disclosure: none
