Is The Tech Wreck Over?

The tech-heavy NASDAQ Composite Index peaked at nearly 5,050 in March 2000, then plunged to less than 2,350 by the end of 2000, and was barely above 1,100 two years later. Both tech stocks and the NASDAQ have recovered a bit since then but that index is still just barely more than half of the high-water mark reached seven years ago - closing at 2,558.45 this past Friday.

Currently, tech stocks offer a combination of relatively low valuations and strong fundamentals. Technology companies have slimmed down, cut costs, and cleaned up their balance sheets since the 1990s. Moreover, many corporations have cash they are likely to use for capital spending, and that spending may be largely on technology.

If your current allocation in tech is relatively low at this time, this may be an opportunity to stock up.

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