Vanguard's Tech ETF Is About 10% Below Its Record. History Says What Usually Comes Next.

The Vanguard Information Technology ETF (VGT) has dropped about 10% from its October 6 record close of $129.80 to around $117. Historical analysis shows that in 14 of 17 past instances when VGT fell 10% below a record, it recovered and gained a median of 21% over the following year. However, all three losing years occurred when declines exceeded 20%, suggesting the initial 10% drop alone isn't predictive. With rising interest rates and the fund trading at 33x earnings versus the broader market's 25x, the author suggests holding but doesn't view the current drop as a bargain.