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Investment perspective

In the chart below, you can see an excellent analysis of the #magnificent7 total returns over the last 2 years. Several conclusions can be obtained: (1) with the exception of Nvdia, Microsoft and Apple, the total returns for these stocks were negative over the 2 year period. (2) the drawdowns in ‘22 where significant, 50-65% in some instances. (3) A passive investor would have obtained low single digit returns in the period should she had invested in the mix equally weighted. (4) An equally weighted S&P500 would have given you zero over the period, and a market cap weighted, would have not been able to provide a positive real return (after inflation). (5) Stock picking and active share have become very important in this market, but also extremely difficult, due to the concentration on a few stocks. (6) a big part of the total return, has occurred over the last two months (not shown on this chart) of this year. It is increasingly difficult to make money in this market despite the indexes double digit returns.


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Source: Charlie Bilello



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