As the title states. Do you think holding something like VGT is likely to outperform the S and P 500 long term?
The fact that tech has become so ingrained in our lives. People are addicted to it and depend on it. Idk if you could even call it a sector at this point. Every other sector that advances is more than likely going to have some sort of tech involved in that advancement.
I’m young and thinking 50% VOO 50% VGT isn’t a bad play for my Roth.
Do you think tech will outperform the market over the next 30+ years
byu/Intelligent_Bid2747 ininvesting
Posted by Intelligent_Bid2747
19 Comments
Tech will out preform even more then it did before…tech will be everything. Tech and energy to run it…
No shit
Yes, absolutely. Unless it doesn’t.
Yes. Can you imagine a future when tech will be less pervasive in your life than it is today? It’s depressing but true unless there’s a cataclysmic worldwide disaster.
Time in the market beats timing the market. Buy low and never sell no matter what.
Yes, and I think US tech will end up infiltrating everything, globally.
Winner take all – especially in tech.
I remember this being asked quite a bit in 2017, when crypto indicated to a lot of people that valuations across all tech were stretched and the market was too speculative.
And then look at the last 9 years.
Bull case: AI will make everything hyper profitable and a large share of global GDP will flow through AI companies.
Bear case: US loses its tech lead over the world. US software runs the world outside of China. Chinese AI will be significantly cheaper and there is a good chance a lot of the world outside US switches over to Chinese AI/tech eco system and US companies lose global market share.
You can see this happening with cars. BYD is now spreading to Europe and Australia, soon Canada. By the end of 2026, US will be the only major economy in the world where BYD isn’t available. They are growing at 30% or more per year everywhere else, displacing western car companies.
Today you go to a random village in rural Indonesia and the local bank most likely uses US tech stack. Like US cloud providers, US software etc. in 20 years, will that random rural bank in Indonesia use American AI? I don’t think so. Not when American AI costs 10x more per token than Chinese ones.
Probably but people also love drinking Coca Cola so maybe not. I just put everything into VOO and let it ride.
No, because IS the market. They are 46% of the S&P 500.
Most sp 500 etfs are heavy tech
A word of warning on that thought process:
https://www.morningstar.com/stocks/you-might-think-industry-growth-drives-stock-returns-heres-why-youd-be-wrong -especially see the section titled “Industry Is Not Destiny”
50/50 chance. It either does or it doesn’t.
Tech is too broad a category now. There’s software, memory, semiconductors, other hardware. Software is iffy, the rest will soar to new heights.
>The fact that tech has become so ingrained in our lives. People are addicted to it and depend on it. Idk if you could even call it a sector at this point. Every other sector that advances is more than likely going to have some sort of tech involved in that advancement.
Counterpoint: all of those facts and opinions are already known and shared by the entire market, and have already been priced in until any foreseeable arbitrage gap has been closed.
If it were clear that tech would outperform the broad market in perpetuity, then people would buy until the price was run up enough that it is no longer outperforming.
I am allocating approximately 1/3 of my Roth to VGT. Too big of a risk to miss out on but also don’t want to get killed if it underperforms the broader markets.
Keep in mind that even with an S&P500 ETF a lot of the top holdings are Tech, so you are getting exposure regardless.
Even if it averages +2% CAGR over total market the next 30 years you will see a massive difference. Imagine if it does +5% like it has in recent years…
tech might be a major portion of the market in 30 year and as a result it will not perform better than the market.
Tech will be the market
Eh
I do. But I think the companies will shift. Some companies were once juggernauts until they weren’t.