Did you know most index funds who are indexing the top 10 biggest company have huge risk exposure to a massive correction? Make sure you know what’s in your fund. The top 10 biggest company make up around 20% of the S&P value and around the same number for NASDAQ. If they get a 20% hair cut on a correction, the S&P would be falling rapidly. Apple had almost a 5% haircut after closing some store in China. You see how fragile the top 10 biggest are??? We may see upwards to 35% correction on them in a market recession or more. So if you are deep value hunting, where should your money be at? Where some big thinker think are in biotech stocks looking to disrupt. Biotech is hard to invest because it’s such a risky business. But for the winners they are going to the moon. Case in point, Regeneron, Exact Sciences, Illuminia, etc... in the past several years. Technology there are deep value too. I would caution anyone who blindly throw money in indexes if you think the stock market is overvalued. Also, if you are passive, become more aware of the market, so you know how your money is going to work for you. With that said, as long as the FED continue to print $$ and companies continue to buy their stocks with fiat money, it’ll keep going up. So how the fed behaves is how one should think about their investment.
