From Nasdaq:



The S&P 500 has seen a significant rise this year, driven largely by the “Magnificent Seven” big tech stocks: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. However, concerns have been raised that these stocks may be overvalued, posing a risk to investors. One potential solution to reduce risk is to invest in an equal-weighted fund, such as the Invesco S&P 500 Equal Weight ETF (RSP), which balances overall risk by giving equal weight to all stocks in the S&P 500. While this strategy may offer greater diversification, it could also lead to lower returns compared to traditional S&P 500 investment funds. In 2023, tech stocks and growth stocks have performed well, making it beneficial to invest in the S&P 500 ETF Trust (SPY). However, for long-term investors looking to hedge and diversify, an equal-weighted fund may be a more stable option. It’s important to note that the Invesco S&P 500 Equal Weight ETF was not among the 10 best stocks identified by The Motley Fool Stock Advisor analyst team, which suggests that there may be better investment options. Overall, the decision to invest in an equal-weighted fund depends on an investor’s risk tolerance and long-term financial goals.



Original: Are the “Magnificent Seven” Stocks Too Risky for You? Consider This Fund