Mortgage The House, Buy Tech Stocks
In the last 13 weeks through Aug. 24, the S&P Information Technology index has been the best performer among the 10 sectors tracked by Standard & Poor's, with a gain of 3.1%, vs. a 2.4% drop in the S&P 500 index. And for the year (through Aug. 24), the tech index has climbed 10.2%, beating the 4.3% rise in the S&P 500.
Though Kessler is relatively optimistic about the sector's healthy fundamentals, he's worried that the mess in the financial sector will harm the overall economy and spending on technology products and services (see BusinessWeek.com, 8/27/07, "Tech Stock Oasis: Can It Last?"). That's why he favors a limited number of large companies with proven track records, such as Intel, Microsoft, Oracle, IBM, and EMC.