If you missed the Magnificent 7 rally, don’t chase it.
The Magnificent 7 delivered ~28% returns in 2025.
Phenomenal performance — but also a signal worth pausing on.
Today:
These 7 stocks make up ~34% of the S&P 500
Up from ~12.5% in 2016
That kind of concentration is rare — and historically, it doesn’t persist forever.
After watching a quickvideo of
@ActusDei with BNP Paribas US Smallcap fund, it got me thinking - where are we now?
Now look at valuations:
US small caps trade at ~15.6x PE (in line with long-term averages - generally between 15-18) earnings growth expectations is upwards of 30% - due to lower base early on
The US market trades at ~23x PE, vs a long-term average of ~20
What does this tell us?
Large caps are priced for near-perfect outcomes.
Small caps are priced with far lower expectations.
And markets usually reward expectation gaps, not past performance.
This doesn’t mean abandoning quality large caps.
It means diversification and rebalancing matter more than narratives.
If your portfolio:
Has no US exposure, or
Is over-concentrated in mega caps
Please reassess and rebalance so benefit from this rally.
If you are looking to rebalace, or build a portfolio from sctratch - checkout Advisoira (
advisoira.com) or reach out to me via DM or email (partha@advisoira.com)
Plans start from as low as INR 7K a year.