How can a value investor participate in the growth stocks found in most Technology Sector ETFs? Wait! That’s right, wait for a sale. The oldest ETF in this sector is the Technology Select Sector SPDR® Fund (XLK). Unfortunately, history has not been kind to this sector ETF due to its’ inception date being near the eve of the DOT COM Market Crash. As you will see in the following chart, XLK has trailed an S&P 500 index fund by 0.81 CAGR with nearly double the volatility. That’s not what most long-term value investors are looking to add to their portfolio. But, there is a way; and that way is waiting. Wait for a significant drop in this sector and then start a position in your chosen Technology fund. What is significant? For me, that’s about a 10% decline, or more. Personally, I’m in no hurry to own a technology fund, but when this sector has a steep decline, I will begin accumulating shares of my chosen tech fund.
XLK vs S&P500: January 1999 – August 2018
Source: https://www.portfoliovisualizer.com/
Continue reading “Best Long-Term Performance Technology ETFs 1.1”