Tech stocks have underperformed the broader market in 2022, a direct consequence of tighter financial conditions. Invesco QQQ Trust series 1 (QQQ:US), a popular ETF used as a gauge for the tech sector, is down over 30% year-to-date (YTD) while the U.S. benchmark index S&P 500 is down just over 20% YTD.
The correlation between the growth-oriented tech sector and interest rates is known to be strong. As interest rates jumped substantially in 2022, the vast majority of tech stocks fell sharply to multi-year lows. It’s exactly this reason why tech investors are having a difficult year.
Earlier this year, Congressman Clifford ‘Scott’ Franklin invested between $50,000 and $100,000 in QQQ. Rep. Franklin disclosed in April that he invested in QQQ on March 21, when it closed at $350.08. Given that QQQ closed at $260.10 on Wednesday, December 28, it means that Rep. Franklin is about 25% underwater on his investment.
Besides QQQ, Mr. Franklin was buying individual tech stocks in Q1 2022 as well. In March, Rep, Franklin invested between $50,000 and $100,000 in Microsoft (MSFT:US) and Cisco Systems (CSCO:US), as well as between $15,000 and $50,000 in Verizon (VZ:US), Apple (AAPL:US), and Alphabet (GOOGL:US).
Despite the fresh YTD low printed in June, Congressman Franklin, the U.S. representative for Florida's 15th congressional district, was buying more tech shares later in the year. For instance, he again invested in Microsoft and Cisco Systems in September.