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Today's market continues to evolve at a rapid clip. That said, traditional broad market exposure is unable to accurately capture long-term secular trends.
A specter is haunting Wall Street—the specter of the “SaaSpocalypse.” Since the iShares Expanded Tech-Software Sector ETF (IGV) peaked on September 19, 2025, it has fallen roughly 30%.
President Donald Trump announced the U.S. will blacklist Anthropic over its refusal to loosen safeguards for the Pentagon, just as the AI company's tools are disrupting cyber stocks. OpenAI subsequently signed an agreement with the U.S. Department of Defense to deploy its models within the government's network. Claude's new security features fueled a cyber scare trade, exacerbated by hotter-than-expected inflation data and rotation away from big tech.
Market sentiment appears overly defensive in certain areas, suggesting potential mispricing in risk assets. The analysis highlights top-tier BDCs, focusing on dividend yields, price/NAV, leverage, and credit quality. Main Street Capital (MAIN), Capital Southwest (CSWC), and Ares Capital (ARCC) offer strong yields with varying risk profiles.
REITs are poised for potential outperformance in 2026, driven by anticipated lower interest rates and investor rotation from growth to value. Getty Realty (GTY) and VICI Properties (VICI) offer attractive valuations, strong fundamentals, and yields near 6%, supporting double-digit total return potential. GTY trades at a forward P/AFFO of 12.77x with 99.7% occupancy, while VICI has diversified assets and achieved 5.1% AFFO growth in 2025.
Sector investing — it's a typical strategy for advisors if their clients are looking beyond broad market exposure by targeting a specific sector. The concept is fairly straightforward, but implementing the strategy is not as simple as it sounds.
Netflix is oversold after a 30% decline, presenting a long-term buying opportunity despite Warner Bros. acquisition uncertainty. NFLX maintains robust fundamentals: 325M subscribers, double-digit growth, 29.5% margins, and a strong $9B liquidity position versus $13.5B debt. Build-A-Bear Workshop offers upside with record sales, double-digit EPS growth, aggressive store expansion, and a debt-free balance sheet supporting dividends and buybacks.
The AI revolution has arrived, and if you're overwhelmed by the past couple years' of momentum or the more recent wave of volatility, it may be best to just go with a tech ETF, especially if you're not interested in chasing winners or buying into dips that might extend deeper than one would think.
If you want to own a piece of the tech sector without picking individual winners, The Technology Select Sector SPDR Fund (NYSEARCA:XLK) offers a straightforward solution.
Shares sold short in XLK have jumped from roughly 6.5 million in November to over 18 million by late January, nearly tripling in just two months, according to Benzinga Pro data.
Dividend stocks and defensive sectors have dramatically outperformed as investors flee AI-vulnerable and AI-spending industries, but valuations now appear stretched. Consumer staples and energy sectors trade at historically high forward P/E multiples, often exceeding the S&P 500, despite lower long-term earnings growth prospects. Materials and industrials have also become extended, with valuations reflecting significant future earnings already priced in, especially given AI infrastructure spending.
In a market environment fraught with uncertainty, concentration risk should be mitigated when looking for sector-specific exposure.
Designed to provide broad exposure to the Technology - Broad segment of the equity market, the State Street Technology Select Sector SPDR ETF (XLK) is a passively managed exchange traded fund launched on December 16, 1998.
Months before Super Bowl LX kicks off at Levi's Stadium on February 9, the game was already being played, predicted, and celebrated across screens worldwide through companies held in the Amplify Video Game Leaders ETF (GAMR).
Three of the smallest sectors in the S&P 500 delivered the index's strongest performance in January, while the two largest sectors weighed on returns. The broad market index gained modest ground last month, with the State Street SPDR S&P 500 ETF Trust (SPY) up 0.6%, according to ETF Database.
Both XLK and FTEC charge the same low expense ratio, but FTEC holds more stocks and has much lower assets under management. FTEC has a slightly deeper historical drawdown and marginally higher volatility.
Consumer confidence has dipped to multi-year lows, yet the coming fiscal stimulus could support consumer spending on essentials. While macro conditions remain mixed, staples' relative stability and essential nature make them compelling considerations for diversified portfolios. Investors looking for defensive exposure can consider opportunities not just in large cap staple giants, but in niche and value-oriented names poised to benefit from macro trends.
CHAT charges a much higher expense ratio but has delivered a stronger 1-year return XLK is far larger and more diversified within the technology sector, while CHAT tilts toward generative AI and applies an ESG screen CHAT has exhibited higher volatility and a deeper recent drawdown, reflecting its concentrated and thematic approach CEO says this is worth 18 Nvidias. Will this make the world's first trillionaire?
It's still early in the year, but a noticeable split is already forming within the technology sector. While the Magnificent Seven and legacy tech leaders have logged respectable gains, they're being decisively outpaced by companies tied to the blockchain and digital asset ecosystem.
With broad markets running over a bit of a rough patch in the middle of January, it's easy to catastrophize and get ahead of oneself with what could go wrong. Undoubtedly, with the Greenland situation and tariff talks in the headlines, it seemed like we were going to experience a Liberation Day 2.0 of sorts.... Could 2026 Be a Repeat of 2022? 1 Stability ETF to Prepare for a Storm.