How crowded trades can be punishing for investors.

Market Dynamics - The market experiences "rotation" during dips, involving the movement of invested money from one sector, industry, or asset class to another [1] - This rotation is fundamentally a "buy low, sell high" strategy, but sectors can become overly dominant [1] - Overcrowded sectors can lead to disproportionate and punishing effects, similar to too many people rushing for an exit [2] Risk Assessment - Big cap technology's dominance in indices means even small selling can significantly impact the indices [2] - Crowded trades in dominant sectors pose a risk of disproportionate losses [2]