The FANG stocks have been taking quite a beating in recent weeks. So much so that just a handful of stocks are responsible for causing significant drops in major market indices.
What are the FANG stocks? That's an acronym that traders uses as shorthand to specifically describe the following firms that, until 2018, had handsomely rewarded investors in recent years.
But a looser version of that acronym also ropes in some other big tech firms, including apple (AAPL), Microsoft (MSFT), and NVIDIA (NVDA), which have also been sucked into the “Tech Wreck” of 2018.
So why is such a small group of stocks having such a large effect on the world's stock markets?
In a nutshell, the rapid growth of these firms in recent years has swelled their market capitalizations, where investors have bid up their stock prices as they've bought millions of their shares.
INX):
At nearly 48% of the Nasdaq 100's value, even small changes in the share prices of these eight stocks can have a large impact on the value of the index. And that, for investors, is why bad news for Big Tech is bad for stocks, and why investors need to consider alternatives to holding large quantities of these companies' stocks in their investment portfolios.
