"Maximize Your Investment Potential with the 'Magnificent Seven' Stocks"

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Source: MarketWatch
"Maximize Your Investment Potential with the 'Magnificent Seven' Stocks"
Photo: MarketWatch
TL;DR Summary

Investors have been rewarded by the concentration in the largest technology companies, known as the "Magnificent Seven," over the past decade. While there are warnings about the risk of such heavy concentrations, an even more focused bet can be made on these companies. Comparisons of three index-fund approaches highlight the success of concentration in the Magnificent Seven. The Invesco S&P 500 ETF Trust is 27.6% concentrated in these companies, and an equal-weighted approach can eliminate concentration risk. The Invesco QQQ Trust has been the clear winner for five years, but the Invesco S&P 500 Top 50 ETF has also performed well. Long-term performance shows that QQQ has outperformed, but XLG has also beaten the S&P 500 ETF Trust.

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