Same As Before

| July 13, 2018
Share |

Concentration at the top.

That proportion of a handful of stocks leading the market is nothing new, however, according to Ned Davis Research Group Chief U.S. Strategist Ed Clissold:

“The top five stocks have often had a higher weight than the bottom half. Since our common stock data set begins in 1972, the average weight of the top five stocks has been 14.3% versus 11.7% for the bottom half. The bottom half’s current weight of 13.7% is only 0.8% points below the record high set in June 2014.”

Currently, the big five make up 14.0% of the S&P 500’s market cap, while the bottom 250 account for 13.7%, according to Clissold.

What’s concerning for him is that those mega-cap companies are hogging all of the index’s gains, noting that although the S&P 500 is within 2.5% of its January 26 peak, only 12.5% of stocks in his multi-cap universe are at 52-week highs, compared to 38% in January.

That means that the gains are more and more concentrated, a sign of a “narrowing market” that may soon reach its peak.

So concentration at the top should not be a concern, but the attribution should be.

 

Stay Tuned, Disciplined & Patient! {TJM}

The Investor & Character Equation (ICE) | S + R = O

 

IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Meyer Capital Group-“Meyer”), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Meyer. Please remember that if you are a Meyer client, it remains your responsibility to advise Meyer, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Meyer is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Meyer’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.meyercg.com. Please Note: Meyer does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Meyer’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Share |