It's hard to justify mega-cap tech's huge rally this year, says Kari Firestone
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- The word of the day is "justified" because the year has been phenomenal for stocks and dividends, so positions in the portfolio need to be justified based on earnings, growth, and valuation.
- The average return of the "magnificent seven" stocks (including Microsoft, Amazon, and NVIDIA) was around 75% this year, making it hard to predict which will perform the best in 2024.
- The market needs to broaden out and see participation from other sectors like financials, healthcare, industrials, and consumer staples for continued growth.
- Schwab is a pick in the financial space because it is believed that interest rates will start to come down, causing people to move cash into high-yielding vehicles like Schwab.