A prominent strategist at Goldman Sachs made some waves in recent days with a bleak long-term forecast for the S&P 500. Specifically, he shared his prediction that the index may only deliver 3% annualized returns over the next 10 years (versus nearly 11% over the past 20 years).
Market-timing is notoriously difficult if not impossible, so we typically do not pay too much attention to such sweeping predictions.
In this case, however, we were intrigued by the main point presented… the fact that the S&P 500 is now so highly concentrated.
With the top 10 holdings of the S&P 500 currently representing some 35% of the index, unprecedented market concentration is indeed a critical variable for stock market investors to consider.
In the latest 76report, we examine this analysis, share our own ideas regarding how investors should think about this major risk factor, and explain where investors should now be looking for opportunities in the stock market.
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