View from the Observation Deck

1. We continue to receive questions about the degree to which the top 50 companies in the S&P 500 Index, by market capitalization (cap), are influencing the performance of the index in the current bull market.
2. The price-only returns featured in the table are shaded in either gray or blue. The gray shaded years indicate that a broad number of stocks are participating in the bull market, while the blue shaded years indicate that the top 50 stocks have garnered more favor from investors. The bull market, as measured by the S&P 500 Index, actually began the day after the close of trading on 3/9/09.
3. We included 1998 and 1999 to remind investors of what top-heavy performance can look like at the extreme. If you recall, the climate in the equity bull market back in the latter half of the 1990s was characterized by former Federal Reserve Chairman Alan Greenspan as "irrational exuberance."
4. From 12/31/09-10/31/16, which captures the period in the chart (excluding 1998 & 1999), the S&P 500 Index posted a cumulative total return of 120.18%, compared to 139.03% for the S&P 500 Equal Weighted Index, according to Bloomberg.
5. Those returns suggest that this bull market has been inclusive, rather than one dominated by the biggest companies, in our opinion.

This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions and other expenses incurred when investing. Investors cannot invest directly in an index. The S&P 500 Index is a capitalization-weighted index comprised of 500 stocks used to measure large-cap U.S. stock market performance. The S&P 500 Equal Weighted Index is comprised of the same companies as the capitalization weighted S&P 500 Index, but each company is allocated a fixed weight, or 0.2% of the index total at each quarterly rebalance.

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