The technology boom was actually bigger than finance in terms of the SPX — it hit 33% of the S&P500 from 5% over 6 years. However, the finance boom lasted much longer, covering 15 years and rallying from 6% to 22% of the S&P500. I have not crunched the numbers, but I suspect that as a percentage of GDP economic activity, the finance boom was considerably larger.
Given that we know market history does not repeat precisely, but so often rhymes, the question confronting investors today is this: Will the future of the finance sector be similar to that of tech?
Information Technology as a Percentage of S&P500
Financials as a Percentage of S&P500
This places the current reaction of the finance sector somewhere in mid 2003, following the first major bounce.
Originally published at The Big Picture and reproduced here with the author’s permission.