Technology starting to bounce back

The technology sector has enjoyed a good start to the New Year, continuing its upward trend since the Nasdaq hit a 52-week low of 1,108 on 10 October 2002. The index has climbed by more than 20% since, fuelling optimism the worst is over. Several factors account for the bounce. In September each year, mutual funds are forced to book losses with the taxman. This results in fund managers offloading stocks but once this end-of-year tax selling is over, buyers come back into the market. Investors also look to realign portfolios towards the end of the year to boost performance. This would...