Dear Reader:
FANG stocks are about to get absolutely destroyed by regulations! Now is probably a great time for investors to slowly wean themselves off the FANG (Facebook, Amazon, Netflix, and Google) stocks.
Those technology and social-media powerhouses have returned between 16.4% and 44.8% annually since 2015, versus a comparatively measly 8.5% return for the S&P 500 index according to FactSet data. But that could all be reversed thanks to burdensome regulations.
Savita Subramanian, head of US equity and quantitative strategy at Bank of America Merrill Lynch also made comments recently saying investors should consider slowly devesting from FANG stocks. “These companies are about to be smacked down from a regulatory perspective,” Subramanian said. “Look at the fact that Mark Zuckerberg was testifying before Congress a year ago. That’s exactly what all the financial CEOs were doing 10 years ago,” she added, comparing scrutiny of the Facebook boss and the regulatory scrutiny of the banking industry that followed the 2008-09 financial crisis.
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Zuckerberg has even taken to begging politicians in Washington to regulate Facebook in a ridiculous self-flagellation exercise. Additionally, privacy concerns and FANG’s growing market power have raised a litany of questions about social-media business models and calls for a breakup of these entities that have echoed calls for a breakup of sprawling banks more than a decade ago.
“I think what we see for tech companies over the next 10 years will be similar, not as bad, but similar to what we’ve seen in other sectors, where tech companies have had essentially a free ride and they’re now about to start to see the costs and pain associated with regulation,” Subramanian added.
And it won’t take long after the government gets involved to destroy the value these stocks are currently providing. Once there’s interference in the market, it becomes more difficult for any of the FANG stocks to continue to make money.
Ask and you shall receive, and FANG is all but demanding to be regulated by the not-so-efficient government bureaucracy.
You should have time to investigate alternatives as well, just keep one finger on the pulse of the market. Perhaps consider cannabis stocks! There are several good options you’ll be able to find one that could work for you. The rate of return isn’t quite as high right now, but soon when cannabis is legal at the federal level, those stocks will shoot sky high! And we all know that we should buy low and sell high.
Another option could be utilities. They have surged on worries that a recession may take hold in the economy that is in its 10th year of expansion. However, it is important to remember that gains for the broader market can still be achieved before the inevitable recession takes hold.
Good luck with your investing!
Best Regards,
James Davis
FutureMoneyTrends.com
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93% Of Investors Generate Annual Returns, Which Barely Beat Inflation.
Wealth Education and Investment Principles Are Hidden From Public Database On Purpose!
Build The Knowledge Base To Set Yourself Up For A Wealthy Retirement and Leverage The Relationships We Are Forming With Proven Small-Cap Management Teams To Hit Grand-Slams!
