SP500 is very concentrated

Hello!

Today I share with you a chart made by Jeff Park and published on X.
It really shows how crazy things have become in the stock market! If you look at the S&P 500 in the 90s, the top 10 companies were big, yes, but they didn’t control everything. They were around 20% of the index, and the rest of the market still had real weight. There was balance.

Now it’s a completely different story. The top 10 stocks make almost 40% of the total market cap. That means if just a few of them move, the whole market moves. It’s no longer hundreds of companies shaping the direction, it’s just a handful of giants doing all the heavy lifting.

You can see it clearly here. The blue line, which shows the top 10, keeps climbing since 2020. The green line, companies ranked 11 to 100, slowly drops. The gray line, the rest of the market, keeps falling hard. All the power, all the money, goes to the same names again and again.

Investors talk about diversification, but this chart shows the opposite. It’s all concentration. Everyone buying Apple, Nvidia, Microsoft, Amazon, because that’s what the ETFs and the algorithms keep doing. The more they go up, the more money flows into them. It’s like an endless loop.

It reminds me of the dot-com bubble in 1999. Everyone thought those big names would grow forever. Then one day, it flipped. The same feeling is in the air now. AI hype, cheap money, too much confidence.

Every time before when the top 10 got too heavy, corrections came later. The market always resets in the end. Right now, it looks like we’re in one of those extremes again.

If one or two of these giant companies start to fall, it could hit everything. That’s the risk nobody wants to talk about. Maybe in a few years, this chart will balance again.
Or maybe this is the new normal, a market run by just 10 names. Either way, it’s a sign of how fragile this system really is... Very very fragile...

I hope you have a great weekend!

Posted Using INLEO