Tech Sector Carries S&P 500 to New Highs, But Concentration Risk Looms for Passive Investors
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The technology sector has vastly outperformed all other S&P 500 sectors over the last 5 years, carrying the index to strong gains.
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The S&P 500 is highly concentrated in mega-cap tech stocks and the top 10 companies make up nearly 31% of the index.
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Investing in an S&P 500 index fund now essentially means making a big bet on the tech sector.
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Your portfolio's performance can diverge widely from the S&P 500 benchmark depending on your tech exposure.
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With the index so tech-heavy, it may not accurately represent the broader stock market anymore.