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Charted: S&P 500 Market Concentration Over 145 Years
457 sats \ 4 comments \ @0xbitcoiner 6h Stacker_Stocks
This isn't very healthy for the SP500, right?
The S&P 500, one of the leading stock market indexes in the world, tracks 500 of the largest companies listed on stock exchanges in the United States.
It covers approximately 80% of available market capitalization and is widely regarded as a key indicator of the performance of the U.S. economy and stock market.
This graphic visualizes the share of the top 10 stocks in the S&P 500’s total market capitalization over time, from 1880 to 2024.
The data comes from Finaeon, S&P500, and Citi Global Insights.
🔗 visualcapitalist.com
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186 sats \ 3 replies \ @grayruby 6h
This is a symptom of passive investing. There is not much breadth in the market anymore.
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80 sats \ 2 replies \ @0xbitcoiner OP 5h
I don't quite see the connection between passive investment and this concentration. Isn't it more the sales dominance of these 10 companies?
https://www.investopedia.com/ask/answers/08/find-stocks-in-sp500.asp
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218 sats \ 1 reply \ @grayruby 5h
Winners continue to win even though their stock prices get ahead of their true value because there is a persistent market cap weighted bid regardless of price from passive funds.
Clearly they are all huge companies I am not saying they shouldn't be the top companies but if you were building a portfolio for yourself with 500 stocks would you allocated 26% of that portfolio to 5 of them. Probably not.
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40 sats \ 0 replies \ @0xbitcoiner OP 5h
... there is a persistent market cap weighted bid regardless of price from passive funds.
indeed. now i get it! Like a snowball effect.
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