The S&P 500 has hit new highs in a bull market entering its third year, with big tech stocks like Apple, Nvidia, and Microsoft leading the charge thanks to investments in artificial intelligence. However, market concentration is at a historic high, a potential warning sign for investors.

Investors may want to consider an equal-weight S&P 500 index ETF like Invesco’s RSP to diversify away from the big tech giants dominating the market. This strategy has historically outperformed in years of decreasing market concentration, offering a way to potentially capitalize on a trend reversal.

With the Federal Reserve cutting interest rates and the money supply growing, economic factors could favor smaller businesses over big tech companies in the future. The trend of market concentration may be nearing its peak, indicating a shift that could benefit investors in the equal-weight index.

The Motley Fool Stock Advisor team has identified 10 top stocks for investors to buy now, excluding S&P 500 Index. Stock Advisor has outperformed the S&P 500 since 2002, providing expert guidance and two new stock picks each month. Consider this option for potential monster returns in the coming years.

Read more at Nasdaq: The Stock Market Is Doing Something It Hasn’t Done in Over a Half-Century, and It Could Signal a Big Move in 2025