CHICAGO, Dec 3 (Reuters) – It’s easy to believe in
technology stocks again.
After a dismal recession and sluggish recovery, the sector
is up 13.3 percent this year through Nov. 30, according to
Standard & Poor’s, slightly ahead of the broader S&P 500 Index.
Expect that run to continue, since gadget-buying will be strong
this holiday season and may continue into next year.
Yet the question for tech investors is whether Apple Inc
should remain a key holding. The stock already
dominates most tech portfolios because of its mammoth market
capitalization, making it one of the most valuable companies on
the planet. Apple is still the largest holding in the S&P 500
and peaked above $700 a share back in September. It’s been
trading below $600 since late October.
I agree with the consensus that Apple’s devices will
continue to grab market share, particularly if it can penetrate
China. But that doesn’t necessarily mean the stock should
dominate some of the biggest technology exchange-traded funds.
Normally, I would suggest that any technology investor buy a
broad-based fund like the Vanguard Information Technology ETF
or the Technology Select Sector SPDR. The
numbers are fairly good right now: The Vanguard fund is up 13.6
year-to-date through Nov. 30, roughly matching the technology
sector’s performance, but lagging four better-performing sectors
– consumer discretionary, financials, healthcare and telecom
services. The SPDR is up nearly 16 percent over the same period.