Information Technology

We have been trading information tech for some years now.  Our largest trading position is Apple, and we have positions in Microsoft, Oracle, Verizon, AT&T, and consistently consider Cisco a good option opportunity.  We plan on adding Intel shortly. In effect something like 30% of our holdings is in technology.  We consider these stocks ripe for future gains and perfectly positioned to gain market share. More and more of your life is being ruled and is dependent on technology. 

Note all the stocks we listed, excepting VZ and T, and something jumps out.  That something is each has a cash horde and no net debt.  The growing part of our economy has NO net debt and huge growth going forward.  If there has ever been a time in our economy where that was so I do not know when.  Add in that Apple has used it's superior credit rating to issue bonds at generational low rates some with maturities out to 100 years. Microsoft just announced a similar debt offering. The idea is to take advantage of its credit rating and use bond proceeds to buy back stock.  The dividend rate is actually higher than the bond interest rate so the effect is immediately positive to the company. Other tech stocks are doing the same. 

This cash hordes are allowing such companies as Google, Apple, and Microsoft to be early partners in emerging technology as well since they invest in these start ups and early age companies and when they go public make a bundle of capital gains. Simply said if you are picking individual stocks you need to have these in your portfolio.  If you are in the S&P 500 index you already have a heavy weighting in them.  So take a look at your retirement assets and make sure you have some exposure to these growing companies and be comforted in knowing that with them there is no need to try and pick some small tech companies because being in the bigger ones you already have some assets those as well.  Take understanding that these big boys know where the opportunities lie and where the opportunities do not lie so let them do the heavy lifting. You just sit and enjoy the capital gains and safe stable dividends backed by all that cash. 

For those so inclined we suggest using VGT, Vanguard Technology Information ETF .