This week we asked the Invstr Community what sector they thought was the most overvalued. The polls revealed a unique split, with 40% of all Invstrs thinking that technology is the most overvalued, this makes sense since tech is the sector that has rallied the most of all of them and holds some powerful big blue chips like FAANG which have done extremely well recently, some would even call them monopolies.
The second most popular choice and taking the silver medal is Currencies. Currencies include crypto such as Bitcoin and Ethereum which started off 2021 with a boom – rocketing to heights never seen before. Confidence in the blockchain technology, as well as crypto’s decentralization, fueled investor interest. Moreover, with institutions beginning to take notice of crypto and join in on the fun, many were very bullish. Despite all this, however, the price was and, in some ways, still is too high to justify, making this a very solid choice pick to be over-valued.
Finally, the bronze medal goes to Pharmaceuticals, barely taking the lead ahead of Finances. Pharmaceuticals have indeed performed well with Biotech stocks focusing on the vaccine pushing the entire sector higher than usual. Lastly, the runner ups are Finance and Aerospace, with both certainly making progress over the last few months although not as overvalues according to the community.
In Finance the most notable events include Hedge funds being short squeezed by angry retail investors and Goldman Sachs CEO’s international scandal. On the aerospace, side progress is being made as Lockheed Martin is signing new naval contracts and Virgin Galactic is testing out their Space Planes.
The future certainly looks bright for Space and Defense and could be a more highly ranked “overvalued” sector down the line. All in all, 2021 is just entering its second month, and sectors may swap rankings here and there, fall off, or even be replaced. Only time will tell!
