Sam Boughedda

Mark Haefele from UBS Global Wealth Management, Chief Investment Officer, stated to clients Wednesday that it is too early for tech failure.

Tech stocks have seen a rebound over the last two weeks but Haefele stated that year-to date, growth stocks had still “underperformed” by a large margin.

According to the analyst, the Nasdaq’s decline in value is 22% versus a decrease of 13% for the. According to the analyst, rising yields have had a negative impact on tech stock valuations, especially for those stocks that aren’t yet profitable. Investors have pulled capital out.”

Many investors ask us if the sale of growth stock shares is a good opportunity. Our view is generally negative about growth stocks. These stocks are likely to be under-performed in 2022, so we advise investors with a time horizon of less than one years to lower their exposure.

UBS instead believes that the current investment environment favors value investing. Value stocks are more successful in inflationary conditions than value stocks.

According to data since 1974, value sector tends to perform better when inflation exceeds 3%. While we expect inflation to fall in the next months, it will likely remain at or above this level for some time.”