In the 1990’s US high tech stocks outperformed all other sectors as well as international equities reflecting the extraordinary technological innovation emanating from these companies. Since 2003, however, leadership in equity markets shifted to energy and emerging markets stocks as global demand for energy grew explosively – until the global recession hit in 2008. More recently, emerging markets and high tech stocks have led the recovery in equities.
A secular re-alignment in equity leadership may again be looming with the next wave dominated by a convergence of high tech, including energy efficient and environmentally friendly technologies, and growing demand in emerging markets.
*Yoav Benari, “Optimal Asset Mix and its Link to Changing Fundamental Factors”, The Journal of Portfolio Management, Winter 1990.
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