The last year saw American tech stocks, in particular the “FANG” (Facebook, Amazon, Netflix, and Google-now-Alphabet) hit record highs. Now, tech stocks have been under pressure, particularly Facebook and Amazon, thanks to the Cambridge Analytica scandal and President Donald Trump’s increasing attacks against Amazon’s business practices.
On Tuesday, an index, which tracks the FANG stocks along with six other mega-cap technology stocks tumbled 6.3%, the biggest decline since September 2014.
Facebook rose as much as 1.5% in early trading Wednesday before falling into the red, one day after sources told Reuters that chief executive Mark Zuckerberg plans to testify before Congress. Amazon dropped 4%, while Netflix fell 5%. Google-parent Alphabet was slightly positive.
CNBC’s Mad Money host, Jim Cramer, admitted that these tech stocks, like most, were not immune to the market-wide sell-off, however, in the last 5 years, their gains have been staggering. According to Cramer, Facebook is up 547%, Amazon has run 441%, Netflix has surged 967% and Alphabet has tacked on 183%.
In comparison, the Nasdaq gained 124% over the same time frame and the S&P 500 climbed 78% — not bad, but weak compared to FANG, Cramer said.
“More importantly, for the last 5 years, FANG has been incredibly resilient. The so-called experts tried to crush these stories over and over again,” Cramer said. “None of it really mattered. Every time, these stocks bounced back.”
“For 5 years, Facebook, Amazon and Alphabet survived everything that the bears had to throw at them, and each time they came out stronger than before,” said Cramer who believe that these tech stocks are still worth investors’ time.
Investing in Alphabet, Facebook and Amazon
If you are concerned about these tech stocks not being able to withstand against the recent market volatility, a well-planned investment strategy tailored to your goals like structured notes can help you be ready for the normal ups and downs of the market, and to take advantage of opportunities as they arise. In fact, it can be less risky than investing directly in Facebook, Amazon or Alphabet.
Here’s how it works
The NEBA’s EFG Tech Trio structured note above is based on three tech stocks underlying (Alphabet, Facebook and Amazon). The buyer of this note will receive a guaranteed return of 10% per annum where a coupon of 2.50% will be paid every quarter over the one-year duration of the note. With an autocall feature, if all underlyings are greater than or equal to their strike price at any quarterly observation date, the note ends prematurely, and buyers will receive their full invested capital.
In case no early redemption has occurred, and the note reaches the end of the investment term, investors will receive 100% of their initial capital as long as the lowest performing underlying closes at or above the protection barrier at maturity. However, if the lowest performing underlying is less than the protection barrier at maturity, the investor will receive the value of the worst performer.
Get in touch with NEBA’s representatives at email@example.com if would like to find more info or would like to invest in this structured product. We’d always be happy to help you out!