Posts  / #POST-207981
REDDIT

Do you worry about concentration risk of investing in SP500?

E
Apr 24, 2025 · 18:47

7% of SP500 total market cap is just Apple.
6% of SP500 total market cap is MSFT

The top 10 holdings accounts for almost 40% of the market cap and includes mostly tech names such as AMZN, GOOG, NVDA, META, TESLA. The only except is Berkshire Hathway at about 2% composition.

I see frequently people post portfolio of SP500 + some individual stock, but that stock is Apple or NVDA. So the question is why would you hold Apple (and similar) and SP500? You are already over exposed to Apple by buying SP500, so why add to the concentration? Wouldn't it be better to invest in a smaller cap name so that you get more diversification (not more concentration) by investing in individual stocks.