28-11-2021, 09:12 AM
https://www.fool.com/investing/2021/11/2...your-mind/
Key Points
1. There is a lot of capital concentration at the top
![[Image: largest-stocks.png&w=2000&op=resize]](https://g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/654686/largest-stocks.png&w=2000&op=resize)
The 10 biggest stocks now make up nearly 30% of total market value. The five largest companies in the S&P 500 -- Microsoft, Apple, Alphabet, Amazon, and Tesla -- are even more disproportionately represented and make up more than 20% of overall capitalization.
2. The market is outpacing GDP by a lot
![[Image: 0f84edb52191359f6a5e47fe68139c86.png]](https://media.ycharts.com/charts/0f84edb52191359f6a5e47fe68139c86.png)
The above chart displays the cumulative percentage growth of the S&P 500 and monthly GDP in the U.S. over the past 30 years.
3. IPO volume spiked in 2021
![[Image: ipos.png&w=2000&op=resize]](https://g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/654686/ipos.png&w=2000&op=resize)
4. Volatility concerns could use some perspective
It's been a wild last few months in the stock market. Investors are simultaneously digesting strange employment news, pandemic uncertainty, threats of high inflation, corporate earnings, and imminent monetary tightening from the Fed. That's created more volatility, which is measured by the CBOE Volatility Index (VIX).
![[Image: ff6b2daee8373c21d6bc5a92b8ba6d96.png]](https://media.ycharts.com/charts/ff6b2daee8373c21d6bc5a92b8ba6d96.png)
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Key Points
- Mega-cap tech stocks have led to massive market returns and now make up a much larger weight of major indexes.
- IPO activity is historically high, which is evidence of abnormally high valuations in the market.
1. There is a lot of capital concentration at the top
The 10 biggest stocks now make up nearly 30% of total market value. The five largest companies in the S&P 500 -- Microsoft, Apple, Alphabet, Amazon, and Tesla -- are even more disproportionately represented and make up more than 20% of overall capitalization.
2. The market is outpacing GDP by a lot
The above chart displays the cumulative percentage growth of the S&P 500 and monthly GDP in the U.S. over the past 30 years.
3. IPO volume spiked in 2021
4. Volatility concerns could use some perspective
It's been a wild last few months in the stock market. Investors are simultaneously digesting strange employment news, pandemic uncertainty, threats of high inflation, corporate earnings, and imminent monetary tightening from the Fed. That's created more volatility, which is measured by the CBOE Volatility Index (VIX).
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![[Image: 17314402_16368319075308_rId5.png]](https://static.seekingalpha.com/uploads/2021/11/17314402_16368319075308_rId5.png)