This Is the Scariest Chart for Index Investors
Index investing has changed over the past two years, and it might be losing some of its benefits. The concentration of the stocks that make up the major stock indexes is different than it's been at any point in history. This impacts volatility, valuation, and dividend yields, and index investors really need to understand what that means for their portfolios.
The market's been on a phenomenal run since the COVID-19 collapse in early 2020. It has erased those losses and then some, charging to all-time highs and historically high valuation ratios. The stars of this rally have been mega-cap and large-cap tech stocks.
In the past, the oil stocks and consumer staples were mainstays among the largest S&P 500 constituents. Not anymore.
Source Fool.com
