Article by Lawrence Hamtil https://fortunefinancialadvisors.com/bl ... -40-years/
Back in the summer of 2017, I demonstrated that the weightings of the S&P 500’s top components were roughly in-line with the historical average, despite all the publicity and discussion the megacap stocks were getting. Fast forward to the beginning of 2021, and the story is very different; by just about any measure, the S&P 500 is the most top-heavy it has been in at least a generation.

Another illustration of how the top of the market is distorting things is to compare the respective capitalization shares and earnings shares of each S&P 500 sector. Unlike 2017 when we last visited the topic, there are material disconnects between certain sectors’ capitalization shares and their earnings shares, with technology and consumer discretionary, for example, currently being over-represented relative to their earnings contributions...
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Of course, none of this is to suggest that these popular growth stocks cannot continue to grow and become an even larger chunk of the market. Yet it seems beyond dispute that the index is now extremely concentrated, and material disconnects are surfacing between the fundamentals (e.g. earnings contributions) of certain segments of the market and their market values. Given all this, one is tempted to wonder if the next decade will be a little kinder to small, mid-, and equal-weight strategies, which have languished, relatively speaking, for years.
