Chris Larsen argues the S&P 500 isn't as diversified as it seems: the top 10 companies make up roughly one-third of the index. Since 2008, stock correlations have risen, so when a big tech company stumbles, unrelated sectors like REITs fall too.
The stock market today. You think you're diversified. If you're, you know of an index fund, it's not diversified. A third of the s and P 500 is. Is 10 the top 10 companies. Yeah. You're buying 10 companies if you buy an index fund. And by the way, what's happened, especially since the great financial crisis. And I have a chart in the book that shows this. Correlations have all gone to one, meaning every stock moves the same as every other stock. You ever notice when you have a red date, everything is red? It doesn't matter. You know that if Amazon dumps its numbers, why do REITs sell off? You know, but they do. And that's the problem, that you can't get diversification.
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