Balancing Act - Are You Tech Heavy?

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.

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%.

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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