As most investors realize, what I refer to as the "21st Century of Technology" requires semiconductors to power nearly every device we use throughout a typical day. That being the case, the current semiconductor shortage is causing significant
The XSD ETF: Semiconductors Rule!
Summary
- The SPDR S&P Semiconductor ETF is an excellent investment vehicle for the bullish long-term demand for ICs to power all the various devices in the "21st Century of Technology".
- Demand from the 5G infrastructure, smartphone, networking, automotive/EV, cloud computing, and data center markets mean the semi-industry is much less cyclical than it used to be.
- Currently, demand outstrips supply. That means strong pricing and significant capital investment in the semiconductor equipment group to build additional capacity.
- As a result, I find the XSD ETF to be an attractive long-term technology holding within a well-diversified portfolio.
Michael Fitzsimmons is a retired electronics engineer and avid investor. He advises investors to construct a well-diversified portfolio built on a core foundation of a high-quality low-cost S&P500 fund. For investors who can tolerate short-term risks, he advises an over-weight position in the technology sector, which he believes is still in the early stages of a long-term secular bull-market. For dividend income, and as a 4th generation oil & gas man, Fitzsimmons suggests investors consider a position in large O&G companies that provide strong dividend income and dividend growth. Fitzsimmons' articles on portfolio management recommend a top-down capital allocation approach that is aligned with each individual investor's personal situation (i.e. age, retired/working, risk tolerance, income, net worth, goals, etc) and might include allocations into investment categories such as the S&P500, technology, dividend income, sector ETFs, growth, speculative growth, gold, and cash.
Analyst’s Disclosure:I am/we are long AVGO SMH. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
I am an electronics engineer, not a CFA. The information and data presented in this article were obtained from company documents and/or sources believed to be reliable, but have not been independently verified. Therefore, the author cannot guarantee their accuracy. Please do your own research and contact a qualified investment advisor. I am not responsible for the investment decisions you make.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.