Tech stocks are in unfamiliar territory as they are not the favorites any more. Investment Expert Jordan Goodman explains why. "They got overpriced, and then you had a supply of new ones coming on with the Special Purpose Acquisition Companies, so there was just too much supply and demand moved on to other stocks like 'cyclicals.' Cyclical stocks are those with prices that follow the ups and downs of the economy. Tech stocks have had an enormous move for a long time. But with a recovering economy as we have now, cyclical stocks tend to do better than tech stocks."
Goodman continues, "We have had a rough time because of Covid - but we're coming out of it now because of the vaccinations. The economy is looking like it's going to be getting much stronger - it already is. That's why it looks like cyclicals will benefit." Goodman says stock trends come and go. "Technology certainly plays an important role in the economy long term - but they have their own ups and downs. They have had this before. The cooling off from what was a super heated Tech rally earlier this year. I think it's kind of normal to have these market cycles. Goodman says Tech stocks became over-priced and competition from new tech companies added to the cooling.
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