The World(MSCI All Country World Index weighting)Entire U.S. stock market: 63%Japan, UK, Canada, France, Hong Kong/China combined: 17.5%Magnificent 7: 17%Source: Dimensional FundsThat seems crazy, no?
For example, in the mid-1960s the concentration of the top 10 was over 40% of the S&P 500.
Investors who own the S&P 500 don't have to pick those winners; they just go along for the ride.
Second, U.S. stocks are global market leaders, and when a small group becomes market leaders it almost always means the U.S. stock market outperforms the world.
The U.S. stock market, which was roughly 40% of the global market capitalization a short while ago, is now roughly 50% of global market capitalization.
Persons:
Gregory Rowe, Berkshire Hathaway, Lilly, It's, —
Organizations:
New York Stock Exchange, Berkshire, Broadcom, Nvidia, Eck Semiconductor, Dimensional Fund Advisors, FS Investments, IBM, American Express, General Electric, Polaroid, Xerox, U.S, Baidu, SAP, Siemens, United, Shell, AstraZeneca, HSBC
Locations:
New York City, Miami Beach, Japan, UK, Canada, France, Hong Kong, China, U.S, Germany, United Kingdom