@lesesa It’s the Pareto Principle. Nothing special here.
Successful companies are going to continue to be successful in capitalism and continue to have a larger weight. Yeah another company or industry might overtake them like Google did to Exxon Mobile, but that doesn’t mean Exxon isn’t still worth a lot of money.
@wordsinthewater Let's say you have $100k account and held the right stocks and out perform sp500 by 7% that's more than $7000 (compounded growth) extra in your account as opposed to all sp500. Do that for 20 years and you can be a lot more wealthy than the average bogle-head.
(It won't work every year of course - but we will see how it goes
I am going to try at least one more year before I give up and go back to all bogle-head - VOO and QQQ)
@abesabre You're freaking out about something that was pretty much completely true a month ago. At one point this year they had rallied and nothing else had. Over 90% of the gains of the index came from those 7 companies. It might be slightly less true now than it was a month ago, but you're raging about something that's not even wrong.
@abesabre People point out the magnificent 7 not just because they are the best performing stocks, but because they are extremely large and have also performed very well, therefore increasing their contribution to the S&P’s return.
@abesabre Well duh, this is kinda exactly why index funds are an amazing invention. Good luck trying to figure out what the very few winning stocks are going to be every year. It’s entirely conceivable and even likely to build your own portfolio of 30-50 individual stocks and still have crappy returns, because your selection didn’t catch the 1-2 outized winners.
@abesabre Even if %-wise many did better, they represent a tiny fraction of the S&P500. The M7 is 30% of the index, so what happens to them significantly influences what happens to the index itself. Also NVIDIA and meta (the two highest gainers) are part of the M7.
