There has been tremendous focus on how significant a small number of stocks were to the S&P 500‘s nearly 29% total return in 2021.
Perhaps this typifies sour grapes, as most active managers underperformed the S&P 500 last year. Witnessing the top contributors — Apple, Microsoft, Google, Tesla, and Nvidia — soar higher was like watching a speeding train whose destination you desperately want to reach. Instead, you merely chug behind at a slower pace due to fear that the leaders might crash soon after you jump onboard.
Apple and its band of four giants were up an average of 65% last year, more than double the index’s return, and responsible for 31% of the S&P’s return last year.