Now that all the required quarterly 13-F reports are filed with the SEC for Q2 2017, it’s time to take a dive into the minds of the Billionaires and take a look at which sectors they think are hot!
A slow quarter in Q2 for the billionaires’ in terms of portfolio changes is reflective of the calm and steady performance of the overall stock market. In fact, the last 8 months have been somewhat uneventful for investors with major indices dipping 1 percent in daily value only twice, and general market prices steadily increasing, registering many record highs along the way.
So looking back over the past 8 months of 2017, what have the billionaires been investing in?
It’s not going to be a big surprise for many, but the answer is: technology!
Tech continues to have the biggest allocation of the iBillionaire Index and based on current trends does not look like it is slowing down. The IBLN Index includes ALL Big 5 tech companies of the 21st century. You know, the ones you’ve been hearing about for years: Apple, Google, Amazon, Facebook and Microsoft. The tech sector continues to be at the forefront of the Billionaires’ minds and with such a high allocation in the Index at a whopping 44% (as of 8th Sept), it speaks volumes as to what the Billionaires’ think of future trends.
As an industry, technology currently has the largest affect over the performance of the overall stock market and with market volatility so heavily correlated with just a few big name companies, many investors are concerned about a top heavy market.
But many believe that these companies have the ability to deliver growth when other industries cannot. And don’t ignore the fact that many of the big-name Tech companies are being led by arguably some of the world’s most inspirational leaders: Jeff Bezos, Elon Musk, Jack Ma… the list is huge!
What makes these stocks so endurable is the fact that these companies have so many different revenue streams and a huge level of diversity due to the number of business lines across different industries.
For example, let’s look at 3 of the most popular: Amazon, Google and Facebook: Amazon has its hands in web cloud services, online retail and now grocery stores; Google has business lines in mobile phones software, advertising and self-driving cars; and Facebook has a huge online presence in social media and advertising, and is also now experimenting with virtual reality technologies. These are just a few of the business lines of these mega-tech companies, but by spreading across different sectors, these smart companies are well prepared to weather the storms if aren’t one particular business line runs into trouble.
Even though there could be significant short-term market volatility, it looks like the growth prospects of these influential Tech Titans is here to stay.
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