Tech stocks have consistently defied doubts and reached new heights, but history shows that the leading sector tends to disappoint after strong performances. Big Tech’s returns may falter in the next decade, especially since it has gained over 20% annually recently. The top sector typically lags in the future after strong past returns.

Despite its recent supremacy, tech may face challenges ahead, with a forecast suggesting significant losses in the coming years. Investors should reassess their US equity allocation, considering options like equal-weighted or value indexes to reduce exposure to tech. Tech’s outperformance calls for tempered expectations and potential portfolio adjustments.

While the future remains uncertain, historical data indicates a potential decline in tech stocks. Investors should consider diversifying away from US stocks, possibly towards foreign stocks or bonds, to manage risk. Tech’s dominance in the market warrants a cautious approach and a closer look at portfolio allocations to align with long-term goals.

Read more at Morningstar: History Suggests Tech Stocks Returns Could Falter. Here’s Why