The Boost: Magnificent Seven

Stocks had a great year in 2023. The S&P 500 was up 24% and the Nasdaq 43%, easily beating their average historical returns. The S&P 500 has averaged 10.3% annually over the past 50 years, while the Nasdaq has averaged 10.4% annually over the past 30 years. Can they repeat the act this year? 

🧠 What you need to know 

It's anyone's guess what 2024 will bring for markets, with many variables in play: the economy, interest rates, oil prices, and geopolitics. That said, understanding what performed well and what didn’t in 2023 will help in understanding your portfolio performance and what may be in store in 2024.

You may have read that seven stocks basically carried the stock market in 2023. Apple, Microsoft, Google, Amazon, Nvidia, Tesla, and Meta, or the “Magnificent 7,” accounted for two-thirds of the S&P 500's 24% return in 2023.

💡 What this means for your portfolio 

Chances are you have some exposure to the Magnificent 7 either through direct ownership of the stocks or an index fund that tracks the S&P 500 or Nasdaq. Many people even hold such a fund in a retirement account.  

The Magnificent 7 represents approximately 26% of the S&P 500 and approximately 50% of the Nasdaq index. Here are the weightings in the S&P 500:

  • Microsoft (MSFT): 6.9% weighting (up 67% in 2023)
  • Apple (AAPL): 6.8% weighting (up 48% in 2023)
  • Amazon (AMZN): 3.3% weighting (up 80% in 2023) 
  • Nvidia (NVDA): 3.0% weighting (up 238%)
  • Alphabet Class A shares (GOOGL): 2.1% (up 60% in 2023)
  • Meta (META): 2.0% (up 172% in 2023)
  • Tesla (TSLA): 1.8% (up 125% in 2023)

While they had a great 2023, they actually declined significantly in 2022. In fact, over a two year period, Amazon and Tesla are down while Meta, Apple, and Google returned less than 10%.

✍🏾 What should you do?

Start by understanding your own portfolio performance in 2023 and what drove it. Here are a few questions to ask:

  • What weighting do the Magnificent 7 have in my portfolio?
  • How did my portfolio perform compare to the market?
  • What does the rest of my portfolio allocation look like?

You may decide to leave things as is, or maybe you’ll want to change things up based on your outlook for the market and these seven stocks.

🤝 How can Mezzi help? 

Within just a couple minutes, Mezzi can help with insights like:

  • Concentration and allocation percentages.
  • View performance by account.
  • View performance in aggregate.
  • Benchmark the performance of each of your accounts
  • Benchmark the performance of all of your accounts