Nvidia has had such a dominant impact on the S&P 500 that if you removed it from the index, U.S. markets would be underperforming their European counterparts since the 2022 bottom.
This single stock has driven much of the index’s recent gains, but disruptions like the developments in AI with DeepSeek have now sent Nvidia into a bear market, weighing down the broader index.
This highlights the risks of overreliance on one company and the potential vulnerability it creates for investors. Our RiskFirst® approach focuses on a balanced approach-diversifying across sectors and regions to mitigate the impact of any one stock or trend on your portfolio’s performance.
The Perilous Power of One Stock

- We believe the preservation of capital is key to consistent, long-term investment success.
- Our investment approach is grounded in economic theory and backed by quantitative analysis.
- Managing drawdown risk is a pillar from which we build our portfolios.
60-Second Breakdown: February 3, 2025
Redwood Senior Analyst Michael C. Sasaki, CFA® discusses recent market performance and explains this week’s chart.
Best Invest Advise EVER!
Bryan Bourgeois, CEO/Founder of Shorebreak Capital, discusses why 90% of investors fail and how to avoid these common investment mistakes with Conner Small, Partner at Redwood Investment Management, Shorebreak Capital’s dedicated asset manager.