If you’ve checked your investment statements lately, you may have noticed something: a handful of big companies are driving most of the stock market’s gains. This isn’t your imagination. Right now, the ten largest companies in the S&P 500 make up close to 40% of the entire index, a level we haven’t seen since the 1960s. That means a big part of the market’s ups and downs now depends on how just a few companies perform.

This creates more volatility than most people realize. When so much of an index rides on a small group of stocks, any bad news about one of them can shake the whole market. And when a handful of companies keep growing bigger and bigger, a drop in that group can hit portfolios harder than expected, even ones that seem “well diversified” on paper.

Here’s why this matters for you. Many popular index funds are what’s called market cap weighted. That means the biggest companies automatically make up the biggest share of the fund. As those companies grow, the fund puts even more of your money into them, whether or not that still makes sense. This isn’t a flaw in the idea of index investing itself. It’s just how this specific approach works, and it’s worth understanding if you own one.

Exercise Judgement – Should you Rebalance?

This is where a financial advisor can help. A good advisor doesn’t just accept how a fund is built. We look at the full picture: your goals, your timeline, and the level of volatility you can comfortably handle. We help build portfolios spread across different companies, industries, and investment types, so your results aren’t tied too closely to any one small group of stocks.

Diversification won’t guarantee gains, and it won’t prevent every loss. But it’s one of the best tools we have for smoothing out the bumps while still growing your money over time. Markets will keep shifting, sometimes quickly, and that’s exactly when a steady hand matters most.

You don’t have to navigate this alone. At Masters Financial Group, we help you build a plan that fits your life, not the market’s mood swings. Interested in a conversation about your financial picture?

Andrew Rabon, Financial Advisor

864.765.0374

[email protected]

Securities offered through LPL Financial, Member FINRA/SIPC. Content provided here reflects personal views and has not been reviewed by LPL Financial for accuracy or completeness. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute personalized financial, tax, investment, or legal advice. All investments involve a degree of risk, including the risk of loss.