No. of Recommendations: 8
Like the economy, the U.S. stock market is alarmingly top heavy. The average Mag 7 stock returned 22.7% in 2025, outperforming the 17.9% gain for the S&P 500, which outperformed the 11.4% increase for the equal-weighted S&P 500, which outperformed the 6.0% gain for the S&P SmallCap 600, which outperformed the 4.8% gain for the equal-weighted version of that benchmark.
Despite a strong year for equities, nearly half of U.S. stocks were down, and some ate dirt in a major way. These names drifted into a deep bear market despite overall euphoric investor sentiment. The bottom fifth of stocks in the Russell 3000 had a median loss in 2025 of 40.0%. For small caps (Russell 2000), the bottom quintile median return was -45.3%!
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