Magnificent 7. Or is it Magnificent 2?
The Magnificent 7, the seven US tech giants, accounted for most of the gains in the S&P 500 in 2023. However, this was against the backdrop of a terrible 2022 for Mag7. Over a longer period, since 2021 for instance, only two of the seven stocks have significantly outperformed the market. This illustrates a general point: past winners are usually not future winners.
Illustrative figure: Weight of 5 Not-So-Magnificent-Anymore stocks as well as the Magnificent 2 in the S&P 500 since 1 January 2021, daily data. Mag2 refers to the right-hand-scale (RHS). Last observation: 21 March 2024.