Tech's 'Magnificent Seven' Stocks Boast huge Gains but Face Risks of Overvaluation
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The "Magnificent Seven" tech stocks (Microsoft, Apple, Amazon, Tesla, Alphabet, Nvidia, Meta) have massively outperformed the broader market over the past year.
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This outperformance has led to premium valuations for those stocks that may not be sustainable long-term.
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Equal-weighted indexes and ETFs have lagged the major cap-weighted indexes like the S&P 500.
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Investors should monitor their portfolio concentration and avoid overexposure to recent high flyers.
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It's wise to periodically rebalance portfolios as relative valuations of stocks change over time.