The Investment Thread

SteveSBrickNJ said

The posters on this thread are so far above me in investing competency. Yet maybe someone will comment on my very basic question:
My 401k has a "Science and Technology" fund that has not done well for months.
With covid still around and more people using technology than in the past....why would such a fund not do well? :unsure:

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One thing to remember is that stock prices are not purely correlated to the company’s sector and products “doing well” in a general sense. Stock price is based on many factors that include a speculative factor of how much the company will be worth in the future. This is often reflected by a “multiple” or price to earnings or price to value ratio - and it is quite fluid, it’s party of the regular fluctuation of a stock’s price. All of this is part of the stock’s valuation.

Information can become available that causes the valuation to decrease even though the company’s business is solid and its products are in-demand. A tech stock like Apple can be solidly hooked into our present and future but it can have a period of depressed value based on things like softening Chinese consumer demand or an anti-trust investigation in the EU. This can also happen across a sector based on things like inflation.