Seven Largest Companies as Share of S&P 500 Total Market Capitalization

Seven Largest Companies as Share of S&P 500 Total Market Capitalization The high concentration of the seven largest stocks in the S&P 500 has raised concerns regarding diversification and market stability. If these stocks were to underperform, potential risks could emerge. Image: Goldman Sachs Global Investment Research

Top 5 Stocks as % of S&P 500 Market Capitalization

Top 5 Stocks as % of S&P 500 Market Capitalization The S&P 500 remains more concentrated in the five largest stocks than during the dotcom bubble, posing potential risks if these stocks underperform and raising concerns about diversification and market stability. Image: Morgan Stanley Wealth Management

Top Five Companies % of S&P 500 Market Capitalization

Top Five Companies % of S&P 500 Market Capitalization The concentration of the S&P 500 in the five largest stocks remains higher than it was during the dot-com bubble, which is seen as a potential risk, as it can lead to increased market volatility and a lack of diversification. Image: BofA US Equity & Quant…

Equity Total Returns

Equity Total Returns Geographic diversification hurt equity performance last year. Image: Richardson Wealth

20-Year Annualized Returns by Asset Class

20-Year Annualized Returns by Asset Class The average American investor still underperforms the market over the long term, generally due to panic selling, emotional biases, the herding effect and lack of diversification. Image: J.P. Morgan Asset Management

Correlation Across Assets

Correlation Across Assets The 1-year rolling correlation remains low between asset classes for diversification. Image: Goldman Sachs Global Investment Research

Correlation of U.S. Bonds to S&P 500

Correlation of U.S. Bonds to S&P 500 The diversification benefit of bonds could be reduced, as the correlation of U.S. bonds to equities has become less negative. Image: Morgan Stanley Research

Super-Cycles – Commodities, Stocks, and Bonds

Super-Cycles – Commodities, Stocks, and Bonds The importance of asset allocation and diversification: commodities, stocks, and bonds do not necessarily moved together over the long term. Image: Wells Fargo Investment Institute