Investing Insights

Over the past few years, just a few large-cap technology stocks have powered the stock market’s returns. That trend shows no signs of abating anytime soon, as demand for artificial intelligence continues to send the tech sector higher. A highly concentrated market can—and has—turbocharged returns, but it also comes with downsides. As tech stocks soar, fund investors may find themselves with portfolios that are significantly less diverse than expected thanks to the outsize influence of a handful of firms like Nvidia NVDA and Microsoft MSFT. Dominic Pappalardo, chief multi-asset strategist for Morningstar Wealth, discusses how today’s narrow market compares with history and how investors can mitigate concentration risk in their portfolios. Morningstar Wealth is part of a registered investment advisor, Morningstar Investment Management.https://www.morningstar.com/markets/whatever-happened-broadening-stock-market-rally On this episode: What do strategists mean when they talk about concentration risk? How did toda