When You Buy Broad U.S. Indexes, Your Exposure Isn't Broad

Most pundits believe Tech’s leadership run is done, claiming vaccine rollouts, re-openings, rising interest rates and looming inflation drive the nails in its coffin. They point to Tech’s year-to-date lag globally versus areas like Energy and Financials—arguing that trend will last. Maybe! But I think it is all just a countertrend head fake before Tech’s roll resumes. Regardless, these swings offer a key lesson: Investing in any single country or region—big or small—carries hidden sector decisions. To truly diversify, you must think globally. Always! Here is why.

In the past decade, US stocks rose 291%, trouncing the rest of the developed world’s 79%. A big reason? Tech. America’s largest sector soared 587%. Huge “Tech-like” stocks in other sectors further juiced US returns (Apple and Amazon as examples).