Quote:
Originally Posted by Rain Man
I've been watching for several years now, and they've always outperformed the S&P 500 and Dow. I figured they'd underperform in a bear market, but nope.
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I've noticed this too and wondered. Take a day 3 years ago where the S&P was up 1% the NASDAQ would be up 1.7%. Vice versa for down. It's always been more volatile so I wondered why it was holding up better.
I knew it was tech heavy and excluded financials. Looking through that list, it looks like it's outperforming more by avoiding downside than gaining upside. It's out performance is based on stocks it doesn't include
It has no
Financials (Bank of America is down 40%)
Oil and Gas (complete massacre)
1 airline, 1 travel company, 1 hotel, and 1 closed retailer that's been mauled (Ulta 50% down)
Any grouping of stocks that avoided the major blast zones would be outperforming. It does have a lot of MSFT & AMZN and they've been lucky to benefit from the coronavirus situation. The big 5 or so tech stocks are all very safe and cash flush and you'd expect money to flock to safety.