Monster (and not so magnificent) Investment Strategies
If you had to name the seven S&P 500 companies returning the highest value for their shareholders in 2024, year to date, who would you put on the list?
Written by Jonathan Wade
Director
Be honest… you’ve got a healthy number of ‘Magnificent 7’ companies in there, don’t you?
I’m afraid only Nvidia made the cut:
Source: Bloomberg/7IM. Data as of 3 May.
The biggest gainers aren’t all from one sector – instead, it’s a healthy mix of tech, aerospace, energy and (not sure you would have had this on your bingo card) Mexican food.
“Nonsense!”, you shout. “It’s just a quarter – you’ve framed this to suit your narrative – go back further and you’d have a different answer!”
Fair, this is super short term, and Apple and Tesla haven’t done so well recently, thanks to their latest earnings. Can we agree that five years seems a fairer balance?
….If so, only one more of the ‘magnificent’ gang has made the list:
Source: Bloomberg/7IM. Data as of 3 May.
Again, no dominant theme. Tech, energy, building materials and healthcare all feature.
If you’ve followed the investment headlines in recent years, this feels surprising – tech has seemed like the only game in town.
But this is exactly why diversification needs to be taken seriously.
Concentration in any one space isn’t just about exposure to the potential lows. Having the blinkers on can also mean big opportunity costs.
Still don’t believe us? Guess which S&P500 company has enjoyed the highest returns of the past 20 years?
Microsoft? Apple? Nope…*
Source: Wikimedia commons
Of course – disclaimer alert – we are not recommending that you invest in any of these stocks, but it is a great reminder that market-beating returns don’t always have to come from Silicon Valley billionaires. The world is bigger than any one sector and portfolios should reflect that.
We haven’t seen too many theses for energy drinks in all of the AI-induced content out there, but over 20 years, this Monster ate Apple for breakfast.
See you next week!
* Here are the rest of the winners:
Source: Bloomberg/7IM. Data as of 3 May.
Based on an article by 7IM