Winners Take Most (Patreon)

Another drastic example of why indices are no bueno

Magnificent 7 (Mag7): In 2023, the Mag7 saw a staggering 106% return, meaning their collective stock prices more than doubled. In 2024, their performance cooled but still delivered a solid 64% return.

S&P 500 ex-Mag7 (the other 493 companies): These companies had a much lower return, with 4% in 2023 and 6% in 2024.

S&P 500 Total: The overall S&P 500 index, which includes both the Mag7 and the other 493 companies, returned 24% in 2023 and 23% in 2024. This is a weighted average, heavily influenced by the Mag7 due to their large market capitalizations.