Big Tech’s recent strong stock performance and large size creates a conundrum for politically-conservative investors who want to align their core beliefs with their investments. Financial advisors and investors are struggling with the dilemma of maximizing their returns without compromising their ethics. The question they ask themselves is, “Do I invest money in a woke company so that I can potentially make a lot of money, or do I invest in a conservative company where I may not make as much, if any? Can I find a balance?”
The reference to Big Tech companies includes the likes of Amazon, Google, Facebook, Twitter, and Apple, due to their recent collective efforts to censor free speech in America. Strictly speaking, they are all not tech companies. Yet in the eyes of the public, they are part of the Big Tech monopoly and will be considered as such for this article.
Is now the time to boycott ownership of Big Tech?
The First Amendment, which protects our freedom of speech and religion, is the bedrock issue that strongly unites all conservatives. These Big Tech companies are actively undermining our freedom of speech and are emboldened by the recently elected Democratic majorities. It is not only the liberal media, liberal CEOs, and campaign contributions that we have grown weary of, but Big Tech companies now have the power to suppress conservative voices, destroy companies, and deny conservatives access to the technological infrastructure that they monopolize. This includes access to e-commerce, cloud technology, credit card processing payments, and more. Big Tech has clearly demonstrated an unabashed and unrestrained willingness to use their power to economically influence those they disagree with. If these companies continue to run roughshod over the conservative beliefs of their shareholders, the silent majority will become the silenced majority in short order.
Results from a recent Gallup poll conducted earlier this year show positive views of Big Tech have fallen 41 percentage points since late 2019, and the majority of poll respondents want more government regulation of technology companies. Given the customer centric business models and rapid growth necessary to justify recent valuations, how can this level of dissatisfaction not affect the bottom line? Big Tech executives fail to realize that the implementation of liberal-leaning policies may result in lost revenue, a growing opportunity for potential new competitors, and vulnerability to government anti-trust actions.
Why our Economy will Have to Split
Certainly, the general market environment should be considered and there are warning signs that Big Tech’s run cannot last forever. On a short-term basis, with a majority of the S&P 500 in correction territory, the market is showing a lack of breadth, which can be a strong leading indicator to a coming overall market correction. But, with another massive economic stimulus on the docket and a significant part of the past stimulus bills still to be distributed, technical indicators are showing a strong long growth in the equity markets. , An article published earlier this year by Bank of America titled “Big tech-led equity inflows fueling ‘mother-of-all asset bubbles”, states that:
The U.S. Federal Reserve for instance has been purchasing bonds at a record pace, doubling its balance sheet to nearly $8 trillion in less than a year. During the same period, the five biggest tech stocks have seen their market value double.
Second, certain technical evidence, such as drastic increases in P/E ratios over the last year and growth’s dominance over value dating back several years, has created a paradox for value investors who are having their long-term underlying assumptions challenged by these factors. The last time Big Tech was this high as a percentage of the S&P 500, was 1999. Everyone should recall the dotcom bubble burst of 2000, which was signaled by prevailing astronomical valuations and P/E ratios of tech companies. Today’s market environment is eerily familiar in that regard, and history tends to repeat itself.
To sum up our outlook, the trillion dollar stimulus money is harrowing and ghastly for our country, great for the economy and marvelous for the market.
If you have been begrudgingly or unknowingly holding onto Big Tech stocks, this confluence of recent events highlights the need for a shift towards greater conservative investing advocacy. The American Conservative Values ETF (NYSE: ACVF) aims to put that advocacy into action by aligning your investments with conservative values.
Learn More About Investing For Conservatives
What Bob Rubin, founder of Rubin Wealth Advisors, has noticed is that, “When speaking with our conservative clients over the past year, they are now becoming willing to take action within their portfolio and let their political beliefs become reflected in their investment allocations. They are moving away from team left companies and moving to those more in line with their political values.”
Rubin continues saying, “What we have also witnessed is that regardless of the client’s propensity for investment risks, they still are making these reallocating / rebalancing moves. While some are more willing to do so than others, overall it is an indication that this is a “philosophy and values” call, not pure dollars and cents call.”
When speaking with politically conservative investors, most would like to align their investments with their political beliefs yet are concerned about performance and the lack of products designed for them. The American Conservative Values ETF was created to address this exact concern.
If you have been begrudgingly or unknowingly holding onto Big Tech stocks, this confluence of recent events highlights the need for a shift towards greater conservative investing advocacy. For example, we have started looking at politically conservative mutual funds and exchange traded funds (ETFs), and the American Conservative Values ETF (NYSE: ACVF) is an example. ACVF aims to put that advocacy into action by aligning your investments with politically-conservative values.
Rubin concludes by saying, “Making our clients aware of the conservative ETF fund options has been exciting. Our clients find the investment philosophy of ACVF to be in-line with their current thinking and their attendant new investment return goals. They are mad enough that they are willing to give up a little upside to help address bigger problems in our country
Tom Carter is the American Conservative Values ETF (ACVF) Portfolio Manager and the President of the ETF’s adviser, Ridgeline Research.
Bob Rubin is the Founder and President of RWA Advisors, a Florida Registered Investment Advisor who specializes in working with politically conservative clients.