It would have been unwise to have been uninvested in the “Magnificent 7,” and fortunately, we have not. The Magnificent 7, which consists of Tesla (TSLA), Amazon (AMZN), Apple (AAPL), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOGL), and Meta (META), have had an amazing run. In fact, over the past 5 years, the Roundhill Magnificent Seven ETF (MAGS) is up 78.79% and even year to date, the fund is up 30.04%.
That said, there has recently been a lot of talk about what will be the next sector to do well. The economy remains on relatively sound footing although there are some signs of weakening as we saw earlier this week in the Job Openings and Labor Turnover Survey (JOLTS). In addition, there is a high probability of multiple rate cuts from the Fed before the end of the year which. The big unknowns are who will be our next President and what party will be in control of the Senate and House of Representatives. This should result in continued market volatility.
As you can see from the chart below, since the end of July, the INVESCO S&P 500 Equal Weight ETF (RSP), is outperforming the Mag 7 ETF by 1.55% as investors try to anticipate what will do well in a rate-cutting environment. Two points 1) time will tell and 2) don’t give up on large-cap technology.
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