Here’s a bit of trivia for you about the supposedly broad-based S&P 500 index…
The 10 largest stocks in the S&P 500 made up 19% of the total stock market capitalization of the index as of 12/31/10. Thus, 2% of the stocks in the index (i.e., 10 out of 500) had 19% of the total value of the index. The S&P 500 is a market-cap weighted index.
The mighty 2% that make up a fifth of the index?
Apple’s market cap has grown since this Q4 2010 snapshot to just above $300 billion as of this morning. Exxon’s has as well, now approaching $370 billion.
There be giants here, skewing the index for sure.