By Arin Ruttenberg *
With the Nasdaq down nearly 30% between January and mid-November 2022, investors will agree that tech giants from Apple to Amazon have had a torrid time this year. And not only investors have suffered: tech companies are laying off workers by the tens of thousands as they try to rein in costs.
It’s easy to imagine that this signals a coming tech Armageddon. But you’d be wrong …
An unemployment no-show
The mass layoffs of US tech workers, 34,000 of them in November this year, is a staggering number but in the bigger scheme is far less worrying. Goldman Sachs estimates that the tech sector makes up only around 2% of the entire US labour force.
This is partly because tech companies are more efficient, not needing as many workers as, say, a steel mill.
So, shocking as the layoffs are to the tech sector, this doesn’t signal the imminent collapse of the US economy. Although the downsizing should bode well for future profits, which is what investors are most interested in.
Tech is too embedded to ignore
Something I find interesting is that nearly 24% of the S&P 500 stocks fall within the information technology sector. But, once you include the tech giants listed in other sectors, then the tech influence on the S&P 500 is probably closer to a third.
Take the example of Amazon and Tesla that sit in the consumer discretionary sector, while Meta, Google and Netflix are in the communications sector.
These companies, and their technologies, have become so embedded in our daily lives that it’s difficult to imagine our future without them. So, they aren’t going anywhere and the 2022 dip is simply part of the market cycle, not an existential crisis of all things tech.
Price has dislocated from value
This year’s poor performance has driven share prices of many tech stocks to the point that they are now starting to show some value.
According to Tony Bell, award-winning fund manager of the Global IP Opportunity Fund, he hasn’t seen tech valuations this attractive since March 2009. The global financial crisis had driven the S&P500 down about 50% from its previous peaks, with all sectors suffering significant draw downs. However, investors who held despite the sharp fall were rewarded handsomely thereafter.
Amazon, for example, dropped 60% in 2008 and despite falling 47% this year, is up 2500% since the 2008 crisis. This shows that there will always be similar opportunities for investors willing to play the long game.
At the end of 2021, Bell shifted asset allocation in the Global IP Opportunity Fund to a higher position in cash at around 25%. He also shifted from growth stocks (tech stocks) into more cyclical and defensive ones.
This was done out of concerns about the expected interest rate hikes of 2022. He notes that while this was the right decision at the time, he has moved back into these longer duration assets since July 2022 because some company valuations have been unfairly knocked down.
The cash position he moved into late last year has been used to buy into tech shares whose prices have dislocated from their fundamentals. These fundamentals haven’t changed, he says, for the likes of Adobe, Netflix and Nvidia.
The prospects for growth stocks therefore seem very promising for 2023, even if only for coming off the lows of 2022. Which is not to say that it’s time to swop out all your defensive positions to go overweight growth stocks. But it would be foolish to ignore the long-term potential that tech stocks have, especially those already so deeply part of our daily routines.
- Arin Ruttenberg is an advisor at Brenthurst Sandton
Megan joined the Brenthurst Wealth team in March 2026 as an Administrative and Fiduciary Services Assistant at our Val de Vie Office in the Western Cape. Prior to joining Brenthurst, Megan gained three years of experience in the retail sector, where she developed management and client service skills.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Esmarelda Isaacs-Andreas joined the Brenthurst Wealth Stellenbosch office in October 2025, taking on the dual role of Receptionist and Fiduciary Administrator.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Ashley joined Brenthurst Wealth in January 2025 as Office Administrative Assistant and Receptionist for the Stellenbosch Office.
René Heystek joined Brenthurst Wealth in November 2023, as receptionist and administrative assistant in the newly established George/Garden Route office.
Michelle Heystek has built a career in the financial services over the last two decades, after obtaining her B.Com degree in Financial Management in 2005. Once she joined Brenthurst in 2006, she continued her academic journey, obtaining her Certificate in Wealth Management from INSETA in 2007, followed by a Postgraduate Diploma in Financial Planning from the University of the Free State. In 2008, she earned the Certified Financial Planner (CFP®) designation.
Anelle joined Brenthurst Wealth as a Receptionist and Administrative Assistant to Brian Butchart in the Cape Town office in December 2023. She has a wealth of knowledge from working as a liaison between Financial Advisers and clients at TMA and Absa Investment Management Services (Aims) since 1998. She obtained her B. com degree from the University of Port Elizabeth in 1997.
ADMITTED ATTORNEY | FINANCIAL PLANNER & HEAD OF BRENTHURST FOURWAYS
Sanet was appointed in April 2020, joining our Cape Town team as an Executive Administration Assistant to Renee Eagar. She has been in the financial services industry since 1990. Her previous experience includes positions at Sanlam, BJM and ABSA. She spent her last 12 years working at Alexander Forbes Private Client Wealth as a Senior Wealth Management Assistant. She has received numerous accolades over the years which include but not limited to, Alexander Forbes Client Service Excellence – Silver award in 2014,2015 and 2017. Sanet has also obtained her Certificate in Wealth Management (NQF 5) in 2012 and achieved “Best Student of the Year” from Moonstone.
Maria Smit is a Certified Financial Planner® with over 10 years of experience in the financial planning industry.
