The large caps, especially the magnificent seven, have carried the market in recent years. Smaller and mid-caps in the U.S. market have underperformed and offer better value. The issue is that the magnificent seven make up such a huge proportion of the S&P500 (about 36%, so the other 493 companies account for the residual 64%), so these fashionable companies are skewing the market. The danger in US equities is for the passive funds which have ridden the wave on the way up and so are disproportionately exposed to seven richly valued businesses. If there is a sell off in those companies, the index will drop significantly, and the passive investors will learn that what goes up, also comes down. The key is to be an intelligent active investor. Cherry pick strong businesses that offer good value. Some of these businesses are in more stable industries less prone to cyclicality and huge R&D expenditure that for the tech sector becomes necessary just to remain relevant - Moore's law springs to mind.
I would not want to be invested in US equities right now, there are huge opportunities overseas.
The large caps, especially the magnificent seven, have carried the market in recent years. Smaller and mid-caps in the U.S. market have underperformed and offer better value. The issue is that the magnificent seven make up such a huge proportion of the S&P500 (about 36%, so the other 493 companies account for the residual 64%), so these fashionable companies are skewing the market. The danger in US equities is for the passive funds which have ridden the wave on the way up and so are disproportionately exposed to seven richly valued businesses. If there is a sell off in those companies, the index will drop significantly, and the passive investors will learn that what goes up, also comes down. The key is to be an intelligent active investor. Cherry pick strong businesses that offer good value. Some of these businesses are in more stable industries less prone to cyclicality and huge R&D expenditure that for the tech sector becomes necessary just to remain relevant - Moore's law springs to mind.