In a recent interview with Quartz, Kevin Gordon, a senior investment strategist at Charles Schwab & Co., discussed the current market trends and potential signals for investors. Gordon highlighted the recent shift away from big tech stocks like Nvidia, noting that this movement could be a positive sign for the market overall. He explained that seeing rotation from high-flying tech names into so-called ‘deeper value’ or cyclical parts of the market could be a healthy development.
Gordon emphasized the importance of giving the rest of the market a chance to catch up, as there has been a significant performance gap between large-cap and small-cap stocks. He pointed out that continued divergence in performance could lead to challenges for investors, similar to what was seen in the second half of 2021. By adding value to areas of the market that have underperformed and focusing on high-quality investments, investors may be able to navigate the current market environment effectively.
One example Gordon provided was the Russell 2000 index, which has seen mixed performance over the past year. While the index as a whole has moved sideways in 2023, high-quality companies within the index have shown consistent outperformance. Gordon stressed the importance of looking beyond the index level and focusing on individual company performance to identify opportunities for investment.
Overall, Gordon’s perspective suggests that taking a selective approach to investing and focusing on quality assets may be key in navigating the current market landscape. By diversifying portfolios and seeking out opportunities in areas that have been overlooked, investors may be able to capitalize on potential market shifts and generate positive returns.
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https://qz.com/nvidia-tech-stock-rally-1851560004