What are the FAANG stocks?
The so-called FAANG stocks — Facebook Inc. (ticker: FB), Apple Inc. (AAPL), Amazon.com Inc. (AMZN), Netflix Inc. (NFLX) and Alphabet Inc.’s (GOOG, GOOGL) Google — have an outsize effect on the stock market because of their weighting in the S&P 500. When you add Microsoft Corp. (MSFT) and Tesla Inc. (TSLA) into the mix — because they’re also huge tech-related stocks — that becomes even more true. “These seven stocks make up approximately a quarter of the total market capitalization of the S&P 500 index,” notes Robert Johnson, finance professor with Creighton University. “Whether passive investors know it or not, they have a very significant exposure to the high-flying FAANGM plus TSLA sector of the stock market.” But their popularity has also made for high valuations, bringing their share prices “far out of line with their profit growth,” says Steven Jon Kaplan, CEO with True Contrarian Investments. Still, many view them as solid investments, and they’ve provided a haven among equities during the pandemic-driven economic downturn.
“FAANGs and other blue-chip stocks are better placed, not just because of fundamentals like revenue growth of these companies, but also because these aren’t subjected to meme-fueled volatility,” says Kunal Sawhney, CEO of Kalkine Group. “The best part is one cannot create quick wealth in these stocks. A broad sell-off hence does not occur.” Facebook, the first name in the acronym, has climbed markedly since its ...
Read Full Story: https://wtop.com/news/2021/08/investing-in-faang-stocks-do-they-deserve-the-hype-2/
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