That’s a very good question. I’m trying not to put all my eggs in the tech basket. Over decades companies and sectors come and go. Jason Zweig wrote a nice article about it this week. Exxon Mobil was #1 for several years, now it’s not even in the DJIA any more.
In general I still support buying the market as it is. I do have a lot of tech stock exposure and my value tilt is rather marginal. But I also want to be prepared in case there is unexpected development, because I do not feel comfortable with a single sector having so much importance, at the same time as a single country has more than half of the developed market’s cap.
If you look at MSCI World, as few as 5 companies have 15% of the weight, and they are in the same country and sector. That’s what is called a “Klumpenrisiko” and I want to make sure I manage that risk. The same goes for the top 3 Swiss companies in the SMI (with an even bigger importance) and that’s why SIX decided to cap them.
One of the arguments behind the value tilt is also that a good company is not always a good stock because it can be overpriced. Even with tech dominating, people still need to drink water, to eat food, to move around, to have electricity, the Internet, gas, heating, houses to live in, to buy cars, to be insured… If these sectors are neglected, this makes them very attractive as an investment, and even more so as the defensive sectors providing the basics fluctuate less in a crisis.