Investment Professionals

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For some years, commentators have been comparing the thundering run in technology stocks to the dotcom bubble of the 1990s. For the past three years, technology has outperformed all other sectors, as promising new technologies have captured investors' imaginations. But comparisons of the present day to the dotcom era are arguably misguided. And claims that technology stocks are in a dotcom-style bubble are most likely wrong. Today’s tech rally vs dotcom The first difference between the two eras is the strength of the tech rally. Simply put: the dotcom rally in technology stocks was far more powerful than today’s. Had you invested $1 into the S&P 500 Information Technology Index, the major gauge of US tech stocks in June 1997, it would have turned into $3.20 by March 2000—a whopping 320% return in just two and half years. ...