Which 4 Stocks Account for 70% of the S&P 500’s Gains

Which 4 Stocks Account for 70% of the S&P 500’s Gains

Posted On February 12, 2020 2:56 pm

President Trump had a field day noting that the new trillionaire club of stocks, “Microsoft (MSFT)”, “Amazon (AMZN)”,  “Google (GOOGL)” and “Apple (AAPL)” spells out MAGA.

Indeed, this new acronym has supplanted the old FANG gang, with Microsoft and Apple replacing “Facebook (FB)” and “Netflix (NFLX)” for good reason; the former, which can both be considered old guard tech from pre-dot.om days, have gained whopping 85% and 120% in just the past 52 weeks while the latter have only eked out 20% and 13% gains over the same period.

The impact has not been just psychological but has had very real, and some would say unhealthy, impact on investor behavior and stock market performance.

Over the past 52-week MAGA has accounted for nearly 70% of the S&P 500 Index’s 37% gain.  And an eye popping 76% for the Nasdaq 100.

The market is getting increasingly top heavy with the top 2, 5 and 10 largest capitalization stocks now accounting for record representation of the overall market—the top 5 of the S&P 500 Index is now near 18%, a decade high.

As you can see, over the last decade the FAAMG stocks have increased their share of the S&P 500 from 7% to 17%.  These tech giants, which used to be valued at $650 billion in 2010, are now worth nearly…

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About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.