It clocked a 25.4-percent rise courtesy of its heavy contingent of tech giants like Apple Inc and Microsoft Corp.As a result, even some growth funds are moving out of high-flying technology stocks and increasing their positions in stocks they see as more reasonably valued at a time when the American Association of Individual Investors survey shows the greatest exuberance for stocks since November 2014.“There is some risk to the technology sector after the big run we’ve had. Where we see opportunities now are sectors that have attractive valuations and higher visibility into their revenue streams,” said Matthew Litfin, a co-portfolio manager of the $4.7-billion Columbia Acorn fund.Litfin is now underweight technology and has been adding to its holdings of financial stocks, such as asset management Lazard Ltd (LAZ.N), which trades at a trailing price to earnings ratio of 15.1 versus 23.7 for the S&P 500 .SPX as a whole. The S&P is up about 2.3 percent.NO GUARANTEESA good year for growth stocks does not necessarily mean that value stocks will bounce back the following year, of course.In the 20 previous occasions that the S&P 500 jumped by more than 18 percent in one year since 1951, the index rose by an additional 10 percent or more the following year 10 times, according to Credit Suisse, with growth stocks leading the way. Macy’s is down 3.3 percent in the first week of 2018, while Diamond Offshore is up 2.1 percent.“There may be positive momentum in the stock market right now, but that is only going to make it more expensive,” Watson said. “We think that the only choice you have now to find opportunities that will pay off in the long-run is to look for value.”

Source: Egypt Today January 05, 2018 21:56 UTC