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Balancing Act - Are You Tech Heavy?

Dec 22, 2023 12:48:44 PM

We humans just love to collect things: rocks, baseball cards, action figures, stickers, and shells. As adults, we still look for value or beauty in our fine art collections, cars, watches, or shoes. Some may turn a profit over time, and others may lose their luster. The point is that often, we hold on too hard to our things, always wanting more. Can there be too much of a good thing? Maybe the goal should be getting the balance right.

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Sometimes, having a lot of one thing can work in your favor. Take a look at how well tech stocks performed in 2023. They actually overperformed from a return perspective. Your tech darlings accounted for 62% of the gains in the S&P 500 for the first six months of 2023. That is more than triple the contribution of the next biggest contributing sector, Consumer
Discretionary, which accounted for 19% of the first-half returns.

It feels good to have a winning combination in your hands, and as you can see in the chart below, the tech sector contributed a lot to the overall
performance of the S&P. They also carried most of the weight (28.10%) and were one of the larger sectors by number of individual stocks. The next largest weighted sector was Health Care at 13.3%.

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While the Tech Sector weighting of 28% may seem high, it is notable that
Tech stocks accounted for over 35% of the S&P 500’s value at the height of the dot-com era.

The highs feel good, but the lows can feel twice as bad if you are not
protected in some way to ride out a dip and recover from it quickly.

The Sweet Spot. A Higher Lows and Lower Highs Investment Philosophy
takes a deeper dive into Vineyard Global Advisors' mantra.

If you suspect that you might be a little heavy in tech, it might be time to
rebalance your expectations as well as your portfolio.

Vineyard Global Advisors offers 12 fee-only, actively managed, including hedged and long-only investment strategies via separately managed accounts - Learn More

 

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Investment advisory services are provided through Integrated Advisors Network, LLC (“Integrated”) a registered investment advisor. Registration does not imply a certain level of skill or training. Vineyard Global Advisors, LLC is a practice group of Integrated.

The opinions expressed herein are those of Vineyard Global Advisors and are subject to change without notice. This material is not financial advice or an offer to sell any product. Forward-looking statements cannot be guaranteed. This document may contain certain information that constitutes “forward-looking statements” which can be identified by the use of forward-looking terminology such as “may,” “expect,” “will,” “hope,” “forecast,” “intend,” “target,” “believe,” and/or comparable terminology. No assurance, representation, or warranty is made by any person that any of Vineyard’s assumptions, expectations, objectives, and/or goals will be achieved. Nothing contained in this document may be relied upon as a guarantee, promise, assurance, or representation as to the future. Vineyard Global Advisors is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Investment advisory services offered through Integrated Advisors Network, LLC (“Integrated), a registered investment advisor. Vineyard Global Advisors is a DBA of Integrated.

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There is no guarantee that the investment objectives will be achieved. Moreover, past performance is not a guarantee or indicator of future results. Does not constitute advice or a recommendation or offer to sell or a solicitation to deal in any security or financial product. It is provided for information purposes only and on the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, any risks associated therewith and any related legal, tax, accounting or other material considerations.

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