No. of Recommendations: 17
SPY was up 25% in both 2024 and 2023.
The Magnificent 7 have been on a roar for the last couple of years. Even today after the recent huge selloffs, S&P500 Top 10 Holdings are 33.47% of Total Assets.
Technology Sector is 31.00%.
That's a lot of concentration in a few stocks, and people who had a large holding have a huge unrecognized gain. A bit of panic and everybody heads to the exits. Which drives down prices and feeds back onto itself.
All of this is true, and explains Thursday's sell off well, when foreign stocks and dividend payers were mostly spared.
In today's sell off, if you look at any broad swath of the market, everything fell 6% +/- 1%. As sleepydragon said, maybe it's the margin calls and people are selling everything to fulfill the margin requirements.
I don't think it's going to stop yet, because the fundamentals have been cut off at the knees by tariffs. Lower earnings, higher inflation, lower profit margins, you name it. A stupid destruction of wealth, a man-child pulling wings off of a butterfly.
