Tech’s Long Recovery Suggests A Bright Future For Financial Stocks

Tech’s Long Recovery Suggests A Bright Future For Financial Stocks
Andrew Rummer

almost 3 years ago1 min

Mentioned in story

Tech’s long and winding road back into the green after the dot-com crash suggests US financial stocks can go on to new heights after finally recovering their losses from the 2008 banking crisis. 

After a near-80% tumble at the start of this century, it took the Nasdaq 100 Index (shown in blue in the chart) a full 16 years to claw back that decline. Following a similar plunge from 2007 to 2009, the S&P 500 Financials Index (in pink) recently managed the same feat – nearly 14 years later.

The Nasdaq is now almost 200% above its dot-com peak after a glorious five-year stretch for tech. Investors in financials – one of the less-loved parts of the US stock market in recent times – will be hoping that history keeps on repeating. 

Of course, financial stocks follow different triggers to those in tech, but investors willing to put faith in a continuing recovery for the sector will find plenty of relevant exchange traded funds (ETF): like the Financial Select Sector SPDR Fund or the iShares US Financials ETF

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