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That might sound like a strange thing to say. It

S&P 500 index

rose 1.6% in the last week, while

Dow Jones Industrial Average

increased by 0.4% and

Nasdaq Composite:

increased by 3%. Apple (AAPL), up 1.5% for the week, certainly did its part.

But over the past few weeks, depending on data providers, Apple’s market capitalization of $2.76 trillion has surpassed the total market capitalization.

Russell 2000

small cap stock index.

And it gets worse. Today’s five largest stocks — Apple, Microsoft ( MSFT ), Alphabet ( GOOGL ), ( AMZN ) and Nvidia ( NVDA ) — have a combined market capitalization of about $8.7 trillion, S&P Almost 25% of 500 and approx. 3.2 times Russell’s cap of $2.7 trillion.

That, says Michael Arone, chief investment strategist at SPDR’s U.S. exchange-traded fund business, is now bigger than the five biggest stocks compared to the Russell 2000 at the height of the dot-com boom in 1999 and 2000.

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This concentration of gains “contributes to investor anxiety,” Arone said, adding that it’s why investors have had an uneasy feeling about the market’s recovery since October.

What’s more, those top five stocks have returned an average of 50% in 2023, accounting for roughly 80% of the S&P 500’s 8% gain. The average stock in the index rose less than 2%, and less than half traded above their 200-day moving average, a level that signals a long-term uptrend. It is a violent rally.

The top five stocks are also expensive. they trade at an average of 31 times estimated 2024 earnings, while the index trades at 17.4 times earnings.

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All of this is unnerving to investors who prefer to see more stocks rally. And they should be. One of those big stocks, Nvidia, is scheduled to report fiscal first-quarter numbers on May 24. Wall Street is looking for adjusted earnings of 92 cents per share, down from $1.30 a year ago. What effect the earnings report will have on the stock, or what effect it will have on the market, is hard to say. Apple, for example, reported no quarterly profit growth in May, and shares are up about 6% since then, although estimates for 2024 earnings have been slashed by a nickel.

That is why Arone says: “Embrace the benefits of diversification.” That might include holding cash in high-yield money market funds or increasing the value of certain securities. Being more diversified doesn’t have to be difficult. It

SPDR Portfolio S&P 500 Value

ETF (SPYV) tracks the performance of value stocks in the S&P 500 and

Invesco S&P 500 Equal Weight

The ETF (RSP) essentially puts the same amount into each S&P stock.

Both of those ETFs have lower price/earnings ratios than the broader S&P 500 and higher dividend yields. And if investors finally tire of the market’s biggest stocks, they should be in a great place.

Write Al Root at