Technology a secular investment trend but caution still warranted

INVESTORS have been wary of the bull market in US stocks for the past few years and who could blame them? First, there was worry over the pace at which the Federal Reserve would raise interest rates and trim its balance sheet.

Then, from 2015 until the third quarter of last year, US corporate earnings were in recession with back-to-back quarterly declines. Now, however, that recession is officially over and 2017 may well herald one of the most profitable seasons for the S&P 500.

To date, the stock market has blithely shrugged off the jitters to scale new highs. But one of the most pertinent questions is whether the technology sector, which has largely powered the rise of the S&P 500, is in the throes of a bubble akin to the one that famously burst between 1999 and 2002.