Journal Editorial Report: The week's best and worst from Kim Strassel, Kyle Peterson and Dan Henninger.
Images: Zuma Press/EPA/Shutterstock Composite: Mark KellyActive portfolio managers claim that agile stock picking is the best way to invest.
Many have lately argued that simple indexing is a bad strategy in today’s environment because the stock market is dangerously “narrow.” Seven stocks—Alphabet, Amazon , Apple , Meta , Microsoft , Nvidia and Tesla—constitute close to 20% of the S&P 500’s value and have been responsible for almost 90% of the index’s gains this year.
Now these “Magnificent Seven” are beginning to falter.
The simple index investor, the active managers warn, will soon be overly concentrated in a small number of stocks that are overpriced and have been hyped by the promise of artificial intelligence.
Persons:
Kim Strassel, Kyle Peterson, Dan Henninger, Kelly
Organizations:
Zuma Press, Apple, Meta, Microsoft, Nvidia, Tesla