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:

1. Information Technology — Computers, operating systems, web infrastructure. Includes stocks like Microsoft and Oracle.
2. Health Care — Medical devices and pharmaceuticals. Think Abbott Laboratories or Johnson & Johnson.
3. Financials — Banks, credit card providers, and insurance companies. American Express, Goldman Sachs, Berkshire Hathaway…
4. Consumer Discretionary — An interesting sector. Consumer Discretionary used to represent retailers or vacation properties, but it’s morphed into tech. Starbucks, Nike, and…