Core Insights - The S&P 500 has reached a record close, but concerns about potential pullbacks are rising among investors [1][5] - The perception of diversification through S&P 500 index investing may be misleading due to its market capitalization-weighted structure [2][4] Investment Strategies - Experts suggest considering total market index funds for broader exposure, which include small- and mid-cap stocks alongside large-cap companies [6][8] - Equal-weighted S&P 500 index funds are recommended for those seeking balanced exposure, though they may incur higher transaction costs [9] Portfolio Management - Diversification is crucial, as historical data shows that other asset classes outperformed the S&P 500 during downturns [10] - Investors should be cautious of overlapping funds that may increase exposure to large-cap technology stocks, potentially skewing risk [11]