Below is a snapshot of current S&P 500 sector weightings. As shown, Technology stocks currently makes up 20.01% of the index, while Telecom stocks make up just 2.45% of the index.
The reason we’re highlighting sector weights is to show just how much weight Energy has lost. After making up more than 15% of the S&P 500 when oil peaked back in early 2008, Energy has lost more than half of its weighting in the index. As of today, Energy stocks make up just 7.15% of the index, and it was in the 6s just a few days ago. With an average weighting of roughly 9.5% historically going back to 1990, Energy is currently well under its “normal” reading. That’s what happens when oil prices crash and the sector enters a bear market. If you’re a long-term investor that likes to “buy low and sell high,” you’d be “buying low” relatively speaking right now.
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