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MAG7 Vs The S&P 493
Only seven stocks are pushing the S&P 500 to new highs.
Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla.
These are “The Magnificent 7.”
Today, I want to explain why the The Magnificent 7 (often shortened to MAG7) are holding the whole market up. And, I want to share why I believe this isn’t a bubble — despite what many people claim.
The Magnificent 7 Vs Everybody Else
In 2023, the S&P 500 posted a 24% gain.
While most people know that the S&P 500 consists of 500 different stocks, many people are unaware that these investments are distributed across 11 different sectors.
In your typical S&P 500 index fund, you have:
- Information Technology — Computers, operating systems, web infrastructure. Includes stocks like Microsoft and Oracle.
- Health Care — Medical devices and pharmaceuticals. Think Abbott Laboratories or Johnson & Johnson.
- Financials — Banks, credit card providers, and insurance companies. American Express, Goldman Sachs, Berkshire Hathaway…
- Consumer Discretionary — An interesting sector. Consumer Discretionary used to represent retailers or vacation properties, but it’s morphed into tech. Starbucks, Nike, and…