When people discuss “the stock market,” they often mean a big index like the S&P 500. But it’s sometimes more informative to break the index down into smaller sections, or sectors, that describe the underlying businesses.
For example, 11 sectors make up the S&P 500 Index. They range from energy and real estate to healthcare and technology, to name a few. Our chart above shows the performance of all 11 sectors since the end of 2017, including the performance of the S&P 500 Index itself.
All the sectors have done reasonably well over the past six years. But you probably notice that one sector in particular stands out: technology. In fact, only the technology sector (gold line) has outperformed the overall S&P 500 Index (green-shaded area) over this period. Every other sector has fallen short of the “average.”
This chart does a pretty good job of describing the investing landscape of the past few years. Big tech has been the dominant force in the market, elevating the average performance of the stock market. This isn’t necessarily good or bad, but for investors, this serves as a good reminder to understand what’s in your portfolio and be aware of the factors influencing its performance.
This is intended for informational purposes only and should not be used as the primary basis for an investment decision. Consult an advisor for your personal situation.
Indices mentioned are unmanaged, do not incur fees, and cannot be invested into directly.
Past performance does not guarantee future results.
The S&P 500 Index, or Standard & Poor’s 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S.