Why I'm Sleeping Easy as Tech Stocks Sell Off

If you're like most folks, I bet you've loaded up on tech stocks... [Chaikin PowerFeed]( Why I'm Sleeping Easy as Tech Stocks Sell Off By Karina Kovalcik, analyst, Chaikin Analytics If you're like most folks, I bet you've loaded up on tech stocks... After all, they've shined since the dark days of the COVID-19 bear market. The tech-heavy Nasdaq Composite Index gained 21% last year. And it was up 44% in 2020. Keep in mind that the index also plunged 30% in March 2020. So it surged a downright silly 88% from the bottom through the end of that year. After massive gains like that, a lot of people are "overweight" the tech sector today. They own more of these stocks than they should. That's causing a lot of pain and sleepless nights for these folks... You see, investors can't seem to run away from the sector any faster right now. Because of that, [the Nasdaq just entered correction territory]( for the first time in nearly two years. Fortunately, if your tech holdings are keeping you up at night, I have a fix for you today. And it's simpler than you might think... Recommended Links: [TONIGHT: Critical Market Briefing]( 2022 is off to a terrifying start: The highest inflation in 40 years... A supply chain crisis leading to empty shelves... Bitcoin has lost half its value... The Nasdaq and S&P 500 recently entered correction territory... And now the Fed is expected to raise interest rates as early as March. If you've felt even a twinge of fear, you can't miss tonight's critical market briefing. [Click here for details](. [How I Saved My Retirement... and Stopped Worrying About Money Forever]( I never worry about my retirement income, no matter what happens with politics or the markets. My money's practically guaranteed by law. Now, a once-in-a-generation opportunity to see 700%-plus potential in my favorite strategy just opened again. [I explain everything right here](. The fix is an investing fundamental known as diversification. Diversification is the idea that you don't want to own too much of one thing. This is true for individual stocks. And it's also true for market sectors, like technology and industrials. If you're holding too many tech stocks today, you have two options... The first option is the more obvious one. I call it "diversification by sale." It's what most people do when they want to diversify their assets. The idea is as simple as it sounds... First, sell your shares in the stock or sector to which you're overexposed. Then, use the proceeds to go buy something else. And most importantly, make sure the "something else" you buy is different from what you're selling. For example, if you're overloaded on tech stocks today, don't sell Facebook owner Meta Platforms (FB) only to turn around and buy social media giant Twitter (TWTR). You want to balance the risk in your portfolio by buying something different – like energy stocks. The second diversification option is what I call "dilution." With this approach, you skip the selling part and just buy something new to offset your overweight position. Of course, this strategy requires two things that many folks don't have – time and money. That's why most investors choose the first option. The specifics of diversification depend on your individual situation and investment goals. But in general, you should limit your exposure in any single sector to 20% or less. Under that guideline, a 25% loss in that sector would equal a 5% loss for your overall portfolio. And if you've diversified your assets, any gains across the rest of your holdings could offset that loss. By properly diversifying, I've slept easily at night despite tech stocks selling off to start 2022. I hope following this fundamental investment strategy will help you do the same. Good investing, Karina Kovalcik Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 -0.44% 3 22 5 S&P 500 -0.33% 54 348 95 Nasdaq -0.16% 5 70 24 Small Caps -1.54% 182 1153 524 Bonds -1.21% — According to the Chaikin Power Bar, Small Cap stocks are more Bearish than Large Cap stocks. Major indexes are mixed. * * * * Top Movers Gainers [rating] GLW +11.16% [rating] ADM +5.70% [rating] AVGO +4.30% [rating] TER +3.67% [rating] MSFT +2.85% Losers [rating] ADP -8.95% [rating] FFIV -8.43% [rating] T -8.42% [rating] HAS -6.06% [rating] TEL -5.76% * * * * Earnings Report Reporting Today Rating Before Open After Close VLO, NOC, MO WRB DOW, IP, MCD, MMC, DOV, MSCI, DHR, ROK, CMCSA, TDY, TROW, TSCO, AOS, XEL MDLZ, WDC, TXT, RHI, NUE, MKC, AAPL, KLAC, JNPR, HCA, EMN, CE, AJG BLL, SHW ALK, V, SYK, RMD, LUV, MA No earnings reporting today. Earnings Surprises [rating] BA The Boeing Company Q4 $-7.69 Missed by $-7.54 [rating] XLNX Xilinx, Inc. Q3 $1.29 Beat by $0.27 [rating] RJF Raymond James Financial, Inc. Q1 $2.12 Beat by $0.36 [rating] INTC Intel Corporation Q4 $1.09 Beat by $0.18 [rating] HES Hess Corporation Q4 $0.85 Beat by $0.12 * * * * Sector Tracker Sector movement over the last 5 days Energy +1.40% Financial -1.81% Real Estate -2.66% Staples -2.77% Health Care -3.12% Utilities -3.37% Industrials -3.48% Information Technology -4.53% Discretionary -5.65% Materials -5.66% Communication -6.99% * * * * Industry Focus Homebuilders Services 0 28 7 Over the past 6 months, the Homebuilders subsector (XHB) has outperformed the S&P 500 by +0.46%. However, its Power Bar ratio, which measures future potential, is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #19 of 21 subsectors and has moved up 2 slots over the past week. Indicative Stocks [rating] CARR Carrier Global Corpo [rating] IBP Installed Building P [rating] RH RH * * * * Chaikin Analytics LLC is not registered as a securities broker-dealer or advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Chaikin Analytics does not recommend the purchase of any stock or advise on the suitability of any trade. The information presented is generic in nature and is not to be construed as an endorsement, recommendation, advice or any offer or solicitation to buy or sell securities or any kind, but solely as information requiring further research as to suitability, accuracy and appropriateness. Users bear sole responsibility for their own stock research and decisions. Read the full disclaimer at [(. You have received this e-mail because you subscribed to PowerFeed, published by Chaikin Analytics. To stop receiving PowerFeed daily, click to [unsubscribe](. 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