Dear readers, a significant development this week was none other than US tech-heavy NASDAQ index finding itself in a correction on 19 Jan 2022 (Wednesday).
A correction is confirmed when an index closes 10% or more below its record closing level. As at 19 Jan 2022, the NASDAQ ended down 10.7% lower from its 19 Nov 2021 , hence confirming a correction. The NASDAQ further slid 2.72% yesterday so much so that in the trading week that has just ended, the NASDAQ closed 6.38% lower, or -11.29% lower in the past month or -13.04% year-to-date.
Is this correction of the NASDAQ an opportunity for investors to invest in and if so, how can investors take advantage of the correction in NASDAQ?
Well, since the NASDAQ is made up mainly of US technology stocks, one way to invest in the current situation is to bargain-hunt certain technology stocks currently trading at more humble levels. But for a more conservative approach, since there is no telling that the technology stock which you are investing in will still continue its fall, investors can look into investing in a ETF that mirrors the performance of the NASDAQ as a whole for diversification of risks.
One NASDAQ-linked ETF that investors can invest in is Invesco NASDAQ 100 ETF (NASDAQ: QQQM). Invesco NASDAQ 100 ETF is structurally quite similar to another ETF that tracks NASDAQ ( Invesco QQQ Trust Series 1 (NASDAQ: QQQ)) though it has lower fees.
However, as a caution, the US stock markets are still volatile and this volatility is set to continue against the environment of increasing interest rates this year. Thus, investors who invest in the NASDAQ now, will though no doubt be coming in at a bargain, but will also risk “catching a falling knife”. Hence, I believe some investors who are focused on a bargain-hunting approach may be, on balance, entering the NASDAQ in traches rather than front-load their investments right now.
That’s it for my insights today. I Thank you once again for your support of SG STOCKS INVESTING, your Money and Lifestyle magazine! I also run another blog Singapore Stocks Investing with similar useful insights! Connect with me here to follow the daily exciting and useful posts on these two blogs, Thank You for your support!
BINGE READ ALL POSTS!
Visit Home Page for more reads or Connect here!