Concerned the Stock Market Is Too Concentrated in the "Magnificent Seven"? Buy This Invesco ETF Instead.

Over the long term, the benchmark S&P 500 index has generated average annualized returns of about 10%. However, during the past two years, it has more than doubled that, generating a total two-year return of about 53%, its best two-year stretch in the 21st century. One big reason for that was the artificial intelligence (AI) boom -- several companies that investors see as being best positioned to take advantage of this technology have soared to gigantic market caps.However, while the returns those few companies have delivered have been great, the result is that eight stocks now account for roughly a third of the total value of the S&P 500. That may have some investors concerned about whether they're truly practicing diversification when they invest in an S&P 500 fund. If you're one of them, here's a way to ease your mind: Buy the Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSPT) instead.The S&P 500 includes roughly 500 companies across every market sector. However, each stock's relative position in the index is weighted based on its market cap, which allows it to better reflect the value of the actual market. Recently, however, due to the success of high-flying tech and AI stocks, the weight of the S&P 500 has become overly concentrated in the Magnificent Seven stocks plus Broadcom (NASDAQ: AVGO) -- a group that a few pundits recently dubbed the "Fateful Eight". Here are each of their weightings in the S&P 500 as of Jan. 1:Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool