For almost two years now, technology companies related to entertainment are in a good position, given the fact that people are spending more time at home, mainly due to the global pandemic that is still posing issues. As a result, stock prices moved up. However, recently many traders are starting to question whether there is still unexplored upside potential in these entertainment giants, now that the world is getting back to normal.
Online streaming companies such as Netflix, Disney, and Amazon, certainly benefited from inflows over the course of the pandemic. These “stay-at-home” stocks have been outperforming other tech peers, and for the right reasons, considering revenue also increased substantially.
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Today a shift away from technology companies, in general, can be noticed, as capital is once again being allocated to cyclical sectors like financials, energy, or industrials. Moreover, people have grown accustomed to the pandemic and are no longer fearful of spending more time in public, except for places where governments still have restrictions in place.
Other related sectors to be impacted?
The situation is gradually deteriorating for entertainment tech stocks, and closely related sectors might also feel it as well. Due to the shortage of semiconductors, for example, producers continue to benefit from higher prices, yet if shortages ease later in 2022, their stocks will also join the list of underperformers. Marketing-related businesses are exposed as well if people spend less time online, which is why a large spillover effect into the broad tech sector should not be ruled out.
Alt-text: online stocks trading
Investing with diversification in mind
However, uncertainty means anything can happen over the upcoming months, which is why investors should rely on diversification as part of their strategies. When working with online trading brands such as TRADE.com, they can gain exposure to a wide variety of stocks and indices, spreading the risk. The result is that traders are not heavily impacted in case a specific asset doesn’t perform as expected.
Since it is a multi-regulated CFD brokerage, TRADE.com serves more than 100,000 investors worldwide and across all its services, providing a larger array of benefits, including some for those who want to start with limited capital.
With 4 different CFD accounts as part of its offer, which includes Silver, Gold, Platinum, and Exclusive accounts, TRADE.com addresses a global audience of people interested in the financial markets. As conditions change constantly, the 2,100+ CFD instruments supplied can provide the opportunity to shift out of tech and into banks or other well-performing sectors.
Inherently, financial assets have a cyclical behavior pattern, which is influenced by credit, economic activity, investments, and other variables. TRADE.com helps traders track them all via a handful of technical and fundamental analysis tools. Standing out is Trading Central, a tool that continues to gain traction in the retail trading space.
Using it, traders can gain access to professional analysis on some of the most popular assets today, including currencies, stocks, indices, and others. TRADE.com has shown a great deal of consistency over the years, which is why this is a broker worth noting by those interested in the financial markets in 2022 and beyond.