10 to 15% of portfolio should be in SMID caps: BMO's Belski

US equities (^GSPC, ^DJI, ^IXIC) waver in pre-market hours as the market patiently awaits Big Tech earnings reports out from Alphabet (GOOG, GOOGL) and Tesla (TSLA) later today. A significant growth driver in the first half of 2024, tech results may signal to investors how the tech trade may play out in the latter half of the year.

BMO Capital Market chief investment strategist Brian Belski joins Morning Brief to give insight into the tech sector and what investors need to keep in mind for their portfolios.

In terms of the broadening out tech trade, Belski states: "I think people are overplaying that a little bit. I know obviously we had very strong concentration in the month of June and then July. We've seen the semblance of what we've been calling for now for several months in terms of the broadening out effect... I talked about the theme of 'everybody love everybody,' meaning own a little bit of everything. And it's starting to really work in terms of investment strategy and portfolio construction."

Belski explains "there's still a lot of clients that are sitting in cash" when addressing whether investors should play in both big (^DJI, ^IXIC, ^GSPC) and small-cap stock names (^RUT):

"If you look at the small mid-cap universe, quite frankly, in the publicly traded marketplace in the United States, it apprises 7%, and so we're saying like 10 to 15% of your portfolio should be in small mid-cap."

He underlines that small and mid-cap universe "has been largely abandoned" and can be beneficial for investors "massively overweight" in mega-cap names.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Nicholas Jacobino