I'll put it this way -- assuming you don't have all of your money in an S&P 500 Index fund -- if you don't own a disproportionate amount of Microsoft, Apple, Amazon and Alphabet (Google) you're dramatically under-performing the broader market; as those four stocks literally account for 67% of the S&P's year-to-date gain.
Now don't go panicking just yet, but the last time we saw that kind of concentration was in 1999.
This inspired me to do a little extra digging this morning: I literally scrolled through the S&P 500 sector by sector and documented the number of members gaining vs losing so far this year.
Here's what I found:
S&P 500 Index year-to-date as of 2/10/2020: 60.66% UP/39.34% DOWN
ENERGY: 35.9% UP/64.1% DOWN
FINANCIALS: 55.38% UP/44.62% DOWN
HEALTHCARE: 65.57% UP/34.42 DOWN
CONSUMER STAPLES: 60.61% UP/39.39% DOWN
INDUSTRIALS: 60.61% UP/39.39% DOWN
CONSUMER DISCRETIONARY: 43.75% UP/56.25% DOWN
REAL ESTATE: 83.87% UP/16.13% DOWN
COMMUNICATION SERVICES: 57.69% UP/42.31% DOWN
UTILITIES: 89.29% UP/10.71% DOWN
TECH: 67.61% UP/32.39% DOWN
So, in a nutshell, 40% of the stocks that comprise the S&P 500 are currently in the red on the year. Therefore, particularly when we look beyond a mere handful of names (above), we have a market that is anything but inspiring thus far in 2020.
In terms of economic signals; the fact that only 44% of consumer discretionary stocks are currently up on the year while those trading in the green among consumer staples, healthcare and utilities are 61%, 66% and 89% respectively is concerning.
Oh, and by the way, while the S&P 500 is trading at what are historically-high valuations -- price to earnings (P/E) 22.31, price to sales (P/S) 2.42 (all time high P/S!) -- take a look at those stocks where 2/3rds of the year's gains are concentrated:
Microsoft: P/E 34.64, P/S 10.63
Apple: P/E 25.45, P/S 5.44
Amazon: P/E 94.08, P/S 3.81
Alphabet (Google): P/E 31.89, P/S 6.47
If -- on top of all of the macro data and corporate debt statistics we've thrown at you the past few months -- you've doubted the logic behind our rotating to a more conservative asset mix, the above should have quelled your concerns...