Tech stock exuberance has pushed the weighting of technology shares (including interactive media and internet retail) to a nearly 40% share of the S&P 500. At the height of the dotcom bubble, tech shares were only 35% of the index.
Without even knowing it, index-based investors are making a major industry bet that could backfire if tech falls out of favor. For perspective, the MSCI EAFE a global non-US index has about a 10% weighting in technology shares.
