Retirement
Should You Diversify Out of Tech Stocks?
It all depends on your appetite for risk.
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The retirement accounts of millions of Americans are packed with technology stocks such as Facebook, Amazon.com, and Apple. It’s been a winning bet, and one that violates a cardinal tenet of responsible investing—diversification.
Many popular U.S.-focused equity mutual funds in 401(k) plans have heavy tech weightings. Even investors in index funds likely have more riding on tech than they realize. More than 21 percent of the $410.4 billion Vanguard 500 Index Fund, which tracks the market capitalization-weighted S&P 500 index, is in tech stocks.