If you have seen your technology and telecommunications portfolio sink, don't panic. According to Salomon Smith Barney SSB analysts, the current contraction in the equity markets is cyclical and not structural in nature and therefore the downside is limited. The primary driver of this cycle, according to SSB, is the United States interest rate environment.
SSB, in a study, looked at the two-year and ten-year United States treasury rate cycles and found a correlation with the NASDAQ and the technology component of the SP 500. Earnings growth declined three times in the last decade, in 1997 1998, 1994-1995 and in 1990-1991. Each time this occurred shortly before technology...
