“The four most dangerous words in investing are: this time it’s different.” – Sir John Templeton
The above chart compares the ten largest companies in the S&P 500 by decade from 1985 – 2025 and makes two important points.
First, leadership changes. Of the ten most valuable companies in 2005, none are still among the most valuable today. Of the ten largest companies a decade ago, only three remain.
Second, concentration risk has increased dramatically. Ten years ago, the largest ten companies collectively accounted for less than 20% of the S&P 500’s total value. Today, that number is closer to 40%.
This concentration risk, combined with today’s passive investing trends, has created an interesting dynamic.
Apollo recently posted the chart below, noting that the average 401(k) investor adds $8,580 per year to their account. Of that amount, roughly $2,358 is going into just seven companies. Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla.1
Predicting the future is hard, but history suggests those at the top will eventually change. And when they do, investors may discover they weren’t as diversified as they thought.
We hosted a seminar at our office on Tuesday. You can check out the slides here. The first chart was pulled from page 8 of the deck.
Personal Note:
Claire recently turned 8, and Jackson was inducted into NEHS.
They are both still at an age where they smile and wave when I walk into their school, and it is the most fantastic feeling in the world.
The average salary is $60,000, with a combined average contribution rate of 14.3%. Additionally, 71% of 401(k) assets are allocated to equities. Source: Apollo Chief Economist
When it comes to writing about investments, the disclaimers are important. Past performance is not indicative of future returns, my opinions are not necessarily those of TSA Wealth Management, an SEC-registered investment advisor, and this is not intended to be personalized legal, accounting, or tax advice etc.
For additional disclaimers associated with TSA Wealth Management please visit https://tsawm.com/disclosure or find TSA Wealth Management's Form CRS at https://adviserinfo.sec.gov/firm/summary/323123
Invest with 7 & Fly “ like an Eagle “ ; then , “ crash like a Dinosaur “ …. ( in 10 years ? )… &, together we are navigating thru life with hindsight- these history lessons! GREAT ! Thanks !
P S I’m “ educated lucky “ it helps … sometimes- hahaha
I enjoy your family activities/images, keeps me smiling! Best !