Why investment portfolios need tech stocks



Before the bull run ended last month and the Dow Jones dropped 38%, big tech was leading the longest running bull run in market history. Google (GOOGL),

Apple (AAPL), Tesla (TSLA), Amazon (AMZN), you get the idea.


Tech was the future, it's the present, and it's what's guiding the stock market into another bull run (cough, cough, and the Fed, cough).


Before last month's market sell-off



Technology shares were beating the broader market before and after the recent stock market sell-off.


From 2013, up to last month's sell-off, the S&P 500 was up 129%. Undoubtedly a great return on investment, but it's important to note the leaders of the S&P that pushed it.


By market cap and percentage gain, the top five stocks in the S&P are all tech stocks. In numerical order, let's see the top five stocks in the index and their performance from 2013 up to last month's sell-off.



As seen in the table, the top five tech stocks surpassed the S&P with their percentage gains. Also, before the sell-off, the stock markets total value was roughly $21 trillion. The top five stocks per market cap accounted for nearly 25% of total stock markets value. Any portfolio that was missing these top five companies were missing out on 25% of the total stock market.


After last months market sell-off


Since the market sell-off, the stock market has bounced back from its lows in March. The S&P is up 27% from its low, but there's no surprise that techs are doing better. Some, such as Amazon, are actually hitting all time highs.



All top four are beating the S&P in terms of gains, and Alphabet is barely trailing, but undoubtedly contributing to the S&P momentum.


Technology is a critical part of an investment portfolio


Many investors believed that because tech stocks led the last bull run, they'd be the stocks to take the biggest losses when we had a market sell off. Turns out, the tech industry continued to outperform. They took less losses than the overall S&P last month and gained more than the S&P as investors started buying again.

Technology is a part of our lives now. It's not going away, but integrating itself into society a little bit more everyday. I'm using technology to write this article as you're using it to read this article.


Be sure to research more about technology stocks before investing, financial movers. Chances are, you'll use technology to do the research.



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DISCLAIMER: This article does not contain financial advice. Any and all market analysis is solely the authors opinion. Investors should do their own research before making any investment.