Nvidia's down 31% since early October. The S&P 500? Barely budged from its high.
This is a textbook reminder of why diversification still works — even when people scream about concentration risk.
Yes, $NVDA had massive weighting. Yes, everyone said the index was "too tech-heavy." But an index fund owns hundreds of names. When one falls, its weight shrinks automatically. Other positions offset the damage. You feel the pain, but proportionally.
That said, concentration risk isn't gone. The real test comes when multiple mega-caps fall together — especially if they're all riding the same AI narrative. We saw a preview on November 5th: sharp AI sell-off, S&P dropped 4.4% in one day.
Index funds can't save you from a bear market. But they do mean your portfolio doesn't live or die by one stock, no matter how dominant it looks today.
After decades managing money, I've seen plenty of "can't lose" names crater. Diversification isn't exciting. But it's kept portfolios alive through every cycle I've traded.
This is a textbook reminder of why diversification still works — even when people scream about concentration risk.
Yes, $NVDA had massive weighting. Yes, everyone said the index was "too tech-heavy." But an index fund owns hundreds of names. When one falls, its weight shrinks automatically. Other positions offset the damage. You feel the pain, but proportionally.
That said, concentration risk isn't gone. The real test comes when multiple mega-caps fall together — especially if they're all riding the same AI narrative. We saw a preview on November 5th: sharp AI sell-off, S&P dropped 4.4% in one day.
Index funds can't save you from a bear market. But they do mean your portfolio doesn't live or die by one stock, no matter how dominant it looks today.
After decades managing money, I've seen plenty of "can't lose" names crater. Diversification isn't exciting. But it's kept portfolios alive through every cycle I've traded.
