The latest chapter in the current stock market story centered around Apple. The company announced it would no longer report how many units it sells of its iPhone. While many are speculating why Apple is doing this, I believe it’s because they want to make less transparent the loss of market share in the emerging markets, where competitors like China’s Huawei are gaining share rapidly.
This episode made me think back to when I was still a licensed investment professional and would sit down with clients to discuss their financial situation. Sadly, I found a very common mistake, which I’m sure is still true today…
A lack of diversification.
Usually, clients would have way too much money in one sector – U.S. technology companies. That’s all well and good until the market hits a weak patch. Then, as we saw most recently, the heaviest losses occur in technology – the sector that had the biggest gains.
I suggested that clients move a little of money invested in technology stocks into what could be called ‘sleep well at night’ stocks. That is, quality conservative stocks, but that have a growth component. I would like to look for steady-as-you-go firms, but those that have some ‘trigger’ that will push the company into a faster growth mode from its past growth trajectory.