FTDS - Passive Investing Could Be Very Costly. What's Your Plan If A Market Correction Strikes?
2024-05-23 02:00:00 ET
Summary
- The price-to-earnings ratio of the Magnificent Seven is not yet at levels seen during the 1999 tech bubble, but historical observations can elude forecast accuracy.
- The S&P 500 Index today is the most concentrated it's been since the 1950s.
- Amid this backdrop, taking a passive approach increasingly exposes investors to a few high-flying securities - and may lead to significant portfolio drag if these stocks begin to fizzle.
Material tail risk appears for passive investing in the current landscape
How long will the Magnificent Seven group of stocks stay magnificent? Are cracks starting to appear in its armor?...
Passive Investing Could Be Very Costly. What's Your Plan If A Market Correction Strikes?