Technology stocks volatility has been a hot topic recently as the tech bubble has poped and major stock market corrections have occurred. The Nasdaq dropped over 10% from its all-time high just days ago on March 2, 2015. Technology stocks volatility is being watched closely by investors worldwide to understand how stocks are affected in relation to the overall market.
As shown above, technology stocks have had their share of ups and downs throughout the last 20 years with the 1999 dot com crash being one of the most prominent drops. The reason that many believe that this occurs because there are not enough leaders in the space so when there is a decline it affects all companies within that sector equally.
That means they don’t have strong quarterly numbers to help them keep up with other leading stocks in the market. With that said, we do believe that there will always be a constant flow of new high growth companies which will drive the space and this trend will continue to support technology stocks volatility throughout the next few years.
As you can see from the graph above, technology stocks have been on an upswing since 2008 as investors feel safer with those companies due to having seen them grow so significantly over such a short period of time. The future is very bright for those stocks as they are leading many other sectors through innovation and their stock prices reflect that.
So if history stays true to form, we could expect another correction in technology stocks volatility but at a much higher price point than what was experienced in 2000-2002, which would be around the $3,000 mark.Recently , we have seen a lot of volatility in the market and in technology stocks. As shown in the graph above, we definitely see many ups and downs with volatile swings over the past three years. That is not to say that there won’t be more corrections; it also isn’t to say that there aren’t any gains either.
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