Hmmmm.
The challenge for investors right now is that roughly 40 AI-related stocks account for nearly half of the S&P 500’s market capitalization. In other words, the S&P 500 increasingly looks like two stock markets: AI-related companies and everybody else. Importantly, over the past year the rolling correlation between these two sectors has declined toward zero and recently turned slightly negative. Thus, when you buy a broad-market index like the S&P 500, you are less diversified than you might think, since there are really only these two sectors left.