Weekly Commentary - NASDAQ reached 13 years high
The NASDAQ Composite Index reached 4000 for the first time since September 2000, the index was boosted by Fed’s easy money policy and high investor demand of fast-expanding companies. The NASDAQ index rose 33% for the year and closed at 4017.75 last Tuesday. In addition to NASDAQ, both the S%P 500 index and Dow Jones Index have great record this year, and they were up 26% and 23% respectively.
Due to Fed promised to hold interest rate for a long period and investors were encouraged to purchase equities and other high risk assets, the upper trend is expected to persist into next year or longer.
By compared with NASDAQ index in 1999, current one is not tech-heavy any more, it is more diversified. In 1999, the index laid stress on technology stocks, which was 66% of the index’s weight, and now it is 45%. Consumer equities comprise 17%, up from 5% in 1999. Health-care equities have risen to 14% from 6%. Therefore the index is less tech-related and lower risk nowadays.
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