Moving swiftly to take advantage of recent declines in technology stock prices, individuals have sharply stepped up their investments in mutual funds that specialize in such shares, according to data gathered for Money magazine's Small Investor Index.
The Hambrecht & Quist Technology Growth index - which tracks the shares of computer and chip makers, biotechnology concerns and other high-tech companies - has fallen 3.6 percent since Nov. 1, in part because several firms have announced disappointing earnings.At the same time, investors have moved nearly $47 million of fresh cash into four large technology mutual funds surveyed by Money. By contrast, investors added only $4 million to those funds in September and October, when the index gained 6 percent.
The shift in investor sentiment has been especially evident with the $157 million Fidelity Select Technology fund. Investors have poured $13.8 million into the fund since Nov. 1, after withdrawing $15.1 million in September and October.
Technology stock analysts say investors are smart to buy now.
"Demand for capital goods is picking up," said Michael Murphy, editor of the California Technology Stock Letter in Half Moon Bay, Calif. "I expect price appreciation of at least 20 percent over the next four months for stocks in the personal-computer peripherals, networking and semiconductor businesses." Murphy is also counting on government approval of several new drugs to lift biotech shares.