The concentration of the S&P 500 in a few major stocks has significantly increased and continues to pose a risk for markets. For instance, Nvidia by itself now carries more influence in the index than some entire sectors. This makes the market more vulnerable to the performance of just one company.
At Redwood, we proactively manage risks like this, aiming to build strategies that protect client portfolios from the effects of such concentrated market exposure.
Concentration Concerns
- 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: September 9, 2024
Michael C. Sasaki, CFA®, discusses recent market performance and explains this week’s chart. Watch Loom.
