There are still many an area of traditional business which is struggling to survive and grow, which prompts the question, is the recent market rally supported by tech shares? If so, does the fickle nature of tech share investment increase the risk of a market correction in the short to medium term?
To be honest there are times when I think the market is supported by tech shares - you hardly hear of investors switching into more traditional investment such as banks nowadays. History shows that tech shares at best dictate the direction of the markets, at worst dominate the market.
As the name suggest, I think the proof is in the pudding and the sharp fall back in many tech shares says everything. Investors had pushed share prices in tech companies to levels which were unsustainable in traditional time let alone with the coronavirus issue.
The tech shares have the highest ratings so it stands to reason they will take the biggest hit when the market falls - the risk of investing in shares with premium ratings!
