As the SP500 begins to cross back above 3000, lets discuss what’s driving this growth, whether it’s a good time to invest, and the strategies you could use to make money – enjoy! Add me on Instagram: GPStephan
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We’ll begin by looking at the SP500, which is an index that tracks the top 500 publicity traded companies here in the United States…and this is weighted, overall, by the companies market value…so, the more valuable the company is, the more that company is going to influence the entire SP500.
Now this is really important to mention…because, out of 500 publicly traded companies…the 6 LARGEST ones make up about 25% of its ENTIRE VALUE…those companies are Facebook, Apple, Amazon, Netflix, Google, and Microsoft – otherwise known as the acronym, FAANGM. Then, the other 494 companies make up the remaining 75% of the value.
https://www.slickcharts.com/sp500
Even more interesting, if we look at every company within the SP500 year to date…we can see that 395 of them have LOST VALUE…and the remaining 110 have seen a moderate gain since the beginning of the year. But, that gain is HEAVILY influenced by the largest tech companies that just so happen to be BOOMING right now.
https://www.slickcharts.com/sp500/performance
The FAANGM stocks have far outpaced and exceeded the growth of the rest of the market, by far…and, over time, they’re becoming increasingly more valuable.
https://www.yardeni.com/pub/yardenifangoverview.pdf
That just means that – most likely – it could be the new “normal” that a few large companies lead the majority of the stock market, as they’re able to reach billions of people through the internet – and this type of growth is going to become more common as we become more and more centralized online and with technology.
For the majority of people out there – a simple broad market index fund is going to be the best option, long term. This means that – instead of going and buying specific stocks – you can invest in ALL OF THEM, at the same time, all in ONE FUND. The benefit to this is that, if a few don’t do so well…most likely, others companies will make up for it. Likewise, if a few do REALLY WELL…you’ll get to enjoy that benefit on a small scale, consistently. Over the long term, it was found that these index funds outperform even the most advanced hedge fund managers…
BUT – Do keep in mind – the REASON the overall stock market has risen so much, WAY more than we’d normally expect – is mainly due to a few specific Tech companies who are doing EXCEPTIONALLY well during the crisis. They are driving a LARGE portion of the market right now, and that’s why we’ve seen such a large resurgence in stock prices while many other companies are down.
Just look at Amazon hitting its ALL TIME HIGH as everything is shut down. Netflix also hit its all time high. So did Facebook. And the other top tech stocks aren’t far behind. So, keep that in mind the next time you invest in the SP500…
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
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K nice
Graham, What do you think about Greenblatt's Magic Formula?
yey
The more money they pump into the economy the worse the lower class people have it because the money is just going to be so inflated 5 years down the road Even though since world war II it's been a shitshow
😨🧏🌹🐧🐕
Which vanguard index fund do you invest in?
13 minute video, 800 ads. lol
liked only because you covered the camera with your hand… like all the youtubers hahah
People don't realize that when you buy a stock you essentially just gave your money away, your hope is a bigger fool will eventually come along and buy from you. But technically, that money is gone.
mine crashed
Hey Graham, what's that web you used for your stock investment and can you recommend which stock tracker web to use?
is the spdr s&p 500 a good one to invest in ?
Im a nice dog, watch my channel🙏
no you cannot trust the wall st rats……….
2 many adds……..greedy
I dare you to click the acorn, you won’t regret it
God bless powell.. And his printer
After watching this video, I am investing in oversized zippers.
So then why invest in a whole market index fund, when you could simply invest in FAANGM or FAT MANG? I looked at Vanguard a couple of times over the past ten years and the FAANGM-Ts buried it.
Over a dozen years ago I invested in Apple, Google, Amazon, and passed on Netflix because they were still mostly mailing out DVDs (Blockbuster by mail, which was a Blockbuster killer, but as my girlfriend pointed out, anybody could buy DVDs and rent them by mail. At the time a valid point. I was asleep at the wheel when Netflix started producing it's own content, much of it very good, and shifted to an online business.) I was never interested in Facebook or Twitter. And I joined the TESLA bandwagon about the same time you did, and would've done it much earlier had I bothered to think about it. I remember Delorean, and Studebaker! (just barely); still Tesla seemed well on its way with the Model S. I think I'm well on track to having my Tesla investment more than cover the payments on a Cybertruck once my place in the queue comes up.
I remember very clearly that until about 2011, every business, investing, news article or mention of, Apple's iPhone was 'at 35% of the U.S. Market they'd saturated their potential customer base and had no place to go.' I'd always thought of a worldwide market and wondered if I'd stupidly missed something. If Nokia did it, why not Apple?
And my suggestion for FAT MANG? Add a Xhosan click and a German cough ending: M!TAANGF or T!MAANGF. Then it'll take a lot of practice to get the pronunciation down, and might make watching all those 'market' experts on cable fun to watch.
So it doesn't make sense to invest in sp500. Just invest in those ten tech companies
And today I regret it cause all stocks keeps going up and I dont have it, only keep cash
If anyone believed this guissed out on making money
I don't have much money, but I need to put these pennies to work
This is going to end badly tho. FED and the government have been just interfering with the free market and the stock market too much. Most of the stocks if not all are way over priced. Tesla for example is overvalued at least 3 times. People just hope tesla is the next Apple. But it is very easy to scale digital services like amazon,google,netflix,facebook or like apple to have huge margin. Tesla has nothing like this. Buying the S&P500 or other indexes is just over exposing you to overpriced companies. That for years have been cheating the system to rise their market valuation and stock price.
Example is what NVIDIA did when they disguised the crypto mining growth in sales as gaming sales.
Other example is companies that have billions in assets and intellectual property that in reality is worth 0. It is not humanly possible to go over the hundred of thousands of patents this companies have.
The stock market is a bubble that has to regulate pressure by droping, if you just blow without releasing the preasure and allow the bubble to stretch it will just pop. $3 trilion in the stock market and the economy is just mindless, let it crash so it can recover let the bad companies go bankrupt so newer leaner and better companies can emerge.
Since the market seems to react strongly to the (slightest bit of good news), then it's logical to presume it's going to explode to record numbers after a reliable vaccine is announced.