At the end of 2025, the ten largest companies in the S&P 500 made up roughly 41% of the entire index.
In 1990, that number was about 19%.
In 2015 — ten years ago — it was still about 19%.
It has basically been flat for twenty-five years. In the last ten years, it has doubled.
Here’s the part that FAR matters more than the number itself.
The index isn’t broken. It’s doing exactly what it was built to do.
An S&P 500 fund is cap-weighted. That means it holds companies in proportion to their size. When a stock goes up, it gets bigger, so the index automatically holds more of it. When it goes up again, more still.
Which means the fund you bought for diversification is designed to concentrate itself into whatever has already won.
Nobody has to make a decision for that to happen. There’s no manager to blame. The mechanism just runs, quietly, year after year, and the longer a small group of companies leads the market, the more of your retirement account ends up sitting on them.
That’s fine — right up until it isn’t.
In 2022 the S&P 500 finished down 18%. Bonds fell too. The classic 60/40 portfolio had one of its worst years in decades, because both sides of it were responding to the same thing: interest rates.
A lot of people found out that year that the four or five funds in their 401(k) were, functionally, one bet.
I found out the same year. I’d been telling myself I was diversified because I owned real estate and index funds. Then rates moved, and both of them moved together, and I learned what my actual exposure was at the worst possible time to learn it.
Nobody called me before that happened.
Nobody called you either. Nobody rebalanced anything. Your statement still says “diversified equity” at the top, and that’s still technically accurate, and it’s still 41% riding on about ten companies clustered in one theme.
Over the last year I’ve asked a lot of people — most of them successful, most of them with seven figures in a retirement account — what percentage of it is in a single asset class.
Almost none of them know.
The ones who go and check usually go quiet for a second when they come back.
So go check. Open the statement, add up the U.S. equity funds, and look at the number.
Then tell me what it is. Just the number — I’m genuinely curious how wide the range is, and I’ll reply to every one.
On September 17th at 3:00 PM Eastern, I am holding a webinar to talk about how six things most people with a seven-figure retirement account have never been told. Comment WEBINAR and I will DM you a link to the registration page, where you can learn more about the content of the webinar and register if you are so inclined.
* Source: RBC Wealth Management / FactSet, “The Great Narrowing,” data through year-end 2025.
My $100,000 Was Here
In 2021 I put a hundred thousand dollars into a multifamily deal and never saw
September 2, 2026
