Ep 48: Why Big Tech Stocks Must Underperform

Retire Smarter with Kevin Kroskey, CFP® & Tyler Emrick, CFA® CFP® · May 14, 2020 · 37m

The five biggest tech stocks -- Amazon, Apple, Facebook, Google, and Microsoft -- are great businesses. They've been so successful over the last decade that they comprise about 20% of the total S&P 500 market capitalization -- a level of concentration not seen since the late 1990s. They also command higher prices (valuation) than the market as a whole.

While these companies have provided outsized growth rates and returns to investors over the last decade, there is no logical reason you should expect similar outsized growth rates and returns over the coming decade. Whether it is due to the…