Page 37 - DIY Investor Magazine | Issue 38

Microsoft Corp, MSFT, 0.89%
Amazon.com Inc, AMZN, 0.03%
NVIDIA Corp, NVDA, 2.66%
Tesla Inc, TSLA, 1.10%
Alphabet Inc Class A, GOOGL, 0.69%
and Meta Platforms Inc Class A, META, 2.73%
— are valued at more than $11 trillion”.
That is pretty amazing when you think that the total UK GDP is less than £2.5 trillion ($3.2trillion). I am not convinced that having so much wealth tied up in so few companies is such a good thing, but we are where we are.
Our portfolios are currently invested in two funds from the Technology & Technology Innovation sector, L&G Global Technology Index and Liontrust Global Technology.
Both have done well and are currently in first and second place in our 26-week table, but the Liontrust fund just has the edge. Last week, our Ocean Liner added to its holding in the Liontrust fund, taking it from 4.2% to 6.5% of the overall portfolio value.
You may well wonder why we are not taking an even bigger position, especially when you consider that it is up almost 40% in the past 26 weeks, but there are a couple of things to take into account.
First, our demonstration portfolios are designed to be cautious. We are trying to explain how our data can be used to make gains, but at the same time protect ourselves from sudden drops in the market.
We are looking for long-term trends and are happy to take our time growing holdings that have a proven track record. For people with more experience, and a higher or lower tolerance to risk, we aim to provide the data needed to help them tailor their investments to suit their own requirements.
I know that many of our subscribers are happy to do this.
Second, it is very easy to be wise with hindsight. You can see that the funds in the graph above initially shot up by around 10%, then did very little for the next 15 weeks, before having another surge.
They could have just as easily gone the other way. If we had looked over the past 12 months you would find that the Liontrust Global Technology fund initially went up, but then fell by 20% before starting on the upward trend that we have seen over the past six months.
It is also worth noting that it is still lower than it was when it peaked towards the end of 2021. So, it has not been plain sailing all the way.
The most recent upturn has been attributed to the fact that inflation in the US has now fallen to 3%, down from over 9% a year ago, and that the US Federal Reserve did not increase interest rates last month.
The technology funds are also gaining additional momentum from the recent hype surrounding anything to do with artificial intelligence (AI).
Last week, the latest data from the Office for National Statistics (ONS) showed that annual UK inflation has dropped from 8.7% in April and May to 7.9% in June. Hopefully that will give UK stocks a similar boost.
For more information about Saltydog, or to take the two-month free trial, go to www.saltydoginvestor.com
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Aug 2023
DIY Investor Magazine ·