Is There Still Time to Buy into the Technology Trend?

June 28, 2018

Should you be concerned about buying a fund that’s done well recently?

Take technology, for example: It’s had some momentum behind it for some time now. Is there still time to buy in?

On NBR, FundX Chief Investment Strategist Jason Browne explained that major market trends can last years and that can give investors enough time to capitalize on them.

Technology has been in favor for over a year now, and it continues to be one of the leading areas of the market today. “It’s something we feel like you can continue to add to until the trend changes,” Jason said.

Jason shared three ETFs that give investors exposure to recently leading areas of the market, including technology, small-cap growth and momentum stocks.

Click here to watch Jason’s interview on NBR.

Three ETFs with Strong Recent Returns

1. For aggressive investors: FirstTrust Dow Jones Internet (FDN)

“This ETF is an aggressive play for a small part of the portfolio,” Jason said. He suggests taking smaller positions in potentially volatile funds like FDN that are concentrated in a single sector.

“If you want to add stocks like Amazon or Facebook to your portfolio, at least this is a relatively diversified way to get some exposure.”

2. For investors willing to take above-average risk: iShares Russell 2000 Growth (IWO)

“IWO is a great low-cost way to add small caps to your portfolio, and it’s still focused on growth because in the current market environment, growth is absolutely what’s leading,” Jason said.

Small caps are generally more volatile than large-cap stocks, so this ETF is best for investors who can withstand higher volatility.

3. For investors who want a core holding with market-level risk: iShares MSCI USA Momentum (MTUM)

“MTUM is a factor-based ETF that’s somewhat more active. It can only invest in U.S. stocks and only large- and mid-cap companies, but it’s done a good job migrating between different things that have been working,” Jason said.

“It’s a nice way to have something in the portfolio that’s doing well today but can help you adapt as leadership changes, which we know it will.”

No trend lasts forever

While these three ETFs are in favor now, as Jason points out in his commentary on the NBR website, “no trend lasts forever.” You’ll want to stay alert to potential changes and adapt your investments as markets change.

Want to know if these funds remain buys, holds or sells?

Sign up for NoLoad FundX and you’ll get monthly updates on these ETFs and hundreds of other funds, plus tips and commentary from Jason Browne and other FundX portfolio managers.

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