Page 25 - ARUBA TODAY

BUSINESS Monday 11 deceMber 2017
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Of Mutual Interest:

Tech is taking over our lives, and our 401(k) accounts

By STAN CHOE gies, a Chinese supplier for
AP Business Writer Apple. A decade ago, the
As technology takes over fund invested more money
more of people’s daily in financials, raw-material
lives, it’s also taking over production and other areas
ever-bigger chunks of their of the market. The portion
retirement accounts. devoted to tech was just
Surging prices for technolo- 12 percent. The fund has
gy stocks around the world ranked in the top 8 percent
mean the industry is making of its category for returns
up a larger proportion of over the last five years, ac-
global markets. In the Unit- cording to Morningstar.
ed States, Apple, Google’s In the United States, tech
parent company and other stocks in the S&P 500 dou-
tech companies account bled the gain of the index
for nearly 24 percent of the through the year’s first 11
Standard & Poor’s 500 in- months. A slump in the
dex. A decade ago, they sector in recent weeks re-
made up less than 17 per- minded investors that tech
cent of S&P 500 index funds. stocks are historically prone
The makeover is even more to price swings and expen-
dramatic overseas, where sive of late, based on sev-
ascendant companies like eral measures of value.
China’s Tencent and Alib- Analysts attribute the drop
aba have quickly stormed An employee monitors prices at the tech-driven Nasdaq MarketSite in New York. From Silicon in tech stocks — nearly
Valley to Shanghai, surging share prices for technology companies means the industry is making
into the ranks of the world’s up an ever-larger chunk of stock funds. Tech companies have been able to produce strong profit 4 percent in a little more
largest. growth for years, even when the global economy was scuffling, but the strong performance also than a week — to inves-
As a result, investing in many raises worries that they’re overpriced. tors looking for reasons to
stock funds has increasingly (AP Photo/Mark Lennihan) sell and take profits. Wash-
become a bet on technol- emerging markets. These Alibaba grew to serve hun- ing Markets Small Cap ington’s push to overhaul
ogy companies. That could kinds of funds offer access dreds of millions of users fund. “In the emerging the tax system served as a
be reassuring for investors to growth in China and oth- buying things with their mo- space, it’s a story about the trigger. Tech stocks stand
given how tech companies er developing economies. bile phones, chatting on- consumer.” to gain less from lower tax
have been able to deliver A decade ago, these funds line and listening to music. The shift toward technol- rates than other industries,
big profit growth for years, were dominated by hulking Now the Vanguard fund, ogy stocks and away from so some investors moved
even when global eco- telecoms, energy compa- which is the largest emerg- old-economy companies is money out of tech and into
nomic growth was only nies and the commodity ing-market stock fund by a result of the rise of emerg- those sectors expected to
middling. But it’s also a producers that feasted on assets, has almost twice as ing markets’ middle class- be tax-overhaul winners,
concern for skeptics who fast growth in construction much of its portfolio ap- es, which are increasingly such as financial compa-
see tech stocks as overly and factory activity. They portioned to technology going online and also ben- nies and retailers.
pricey and primed for a included China Mobile, the stocks. Its biggest single efiting from the world’s vo- But technology companies
pullback. The worries came Brazilian oil giant Petrobras holding is Tencent, which racious demand for tech- are in the midst of reshap-
into starker relief in recent and Russia’s Gazprom nat- is behind the popular We- nology, she said. ing several industries, from
weeks, after tech stocks ural-gas company. Chat messaging app and Ribeiro has 33 percent retail to media, and pro-
tumbled more than the rest In late 2007, technology other products. of her Emerging Markets ponents see even more
of the market. companies made up less “It’s a sign of the times,” fund invested in technol- growth ahead.q
To see how the tech take- than 11 percent of Van- said Patricia Ribeiro, senior ogy stocks, more than any
over is changing investing, guard’s Emerging Markets portfolio manager at the other sector. Some of her
consider mutual funds and Stock Index fund. But in the American Century Emerg- recent acquisitions include
exchange-traded funds ensuing years, tech com- ing Markets fund and the Momo, a Chinese dating
that focus on stocks from panies like Tencent and American Century Emerg- app, and AAC Technolo-

US consumer borrowing up $20.5 billion in October

By MARTIN CRUTSINGER 2016, the Federal Reserve sumer spending heading after a 3.1 percent rate in
AP Economics Writer reported Thursday. into the holiday shopping the spring. It marked the
WASHINGTON (AP) — The category that covers season. Consumer spend- first back-to-back quarterly
American consumers in- auto loans and student ing accounts for 70 percent gains above 3 percent in
creased their borrowing loans was up $12.2 billion, of economic activity. three years.
by $20.5 billion in October. slightly slower than the $13.2 Reports from the retailers The overall gain in bor-
It was the biggest gain in billion rise in September. have indicated a strong rowing pushed consumer
11 months and reflected Borrowing in the category start to the holiday season credit to a new record of
strong increases in the use that covers credit cards with shoppers buying more $3.8 trillion. The Federal Re-
of credit cards and in auto rose by $8.3 billion, up from than last year. serve’s monthly consumer
and student loans. a $6 billion increase in Sep- The U.S. economy, as mea- credit report does not cov-
The October followed a tember and the strongest sured by the gross domestic er home mortgages or any
$19.2 billion gain in Sep- showing since November. product, grew at a healthy other loans secured by real
tember and was the best The solid gains were good rate of 3.3 percent in the estate such as home equity
showing since November signs for strength in con- July-September quarter loans.q