All investors know their portfolios should be diversified, with exposure to a variety of asset classes and regions so that they have a better chance of capturing upside in any particular segment of the global economy that’s doing well, or to protect against outsize losses in any segment’s downturn. But when it comes to another form of diversification, across individual sectors of the U.S. stock market, the benefit could be less meaningful than you might expect, even with the massive outperformance that has been seen in the technology sector over the past several years. According to data from GMO, no single sector does so well over time that an investor really misses out by not holding it. The following table, which looks at market returns over three different time horizons, shows that a portfolio that excludes a single industry — for example, the S&P 500, ex-energy — isn’t too different from the overall market in terms of performance. This trend holds regardless of which sector is removed. via