The Stock Market Flashes a Warning Never Seen Before: 2 Brilliant Index Funds to Buy Now

Core Insights - The S&P 500 is experiencing unprecedented concentration, with the 10 largest companies accounting for about 40% of the index's weight, significantly above the long-term average of approximately 20% [1][2] Group 1: Market Concentration - Analysts express concern that high concentration may lead to lower S&P 500 returns over the next decade compared to a less concentrated market [2] - The top 10 stocks in the S&P 500 account for 35% of the index's earnings, making the current weight of 40% reasonable [6] Group 2: Investment Alternatives - The Invesco S&P 500 Revenue ETF tracks the S&P 500 but weights stocks based on trailing-12-month revenue, imposing a 5% weight cap on individual stocks [3][5] - The Invesco S&P 500 Equal Weight ETF measures performance by giving equal weight to all constituents, eliminating concentration risk entirely [8][9] Group 3: Performance and Fees - The Invesco S&P 500 Revenue ETF has returned 545% since its inception in 2008, while the S&P 500 has returned 630%, indicating potential for continued underperformance due to concentration risk [6][10] - The Invesco S&P 500 Revenue ETF has a relatively high expense ratio of 0.39%, while the Invesco S&P 500 Equal Weight ETF has a lower expense ratio of 0.2%, making it a more cost-effective option for investors seeking exposure without concentration risk [7][11]