Claims that the top 5 or 10 stocks are the only or major drivers of the market cannot withstand close scrutiny.

We discussed this yesterday while using S&P500 index with equal weight And the performance of the industry shows that this is a broad and healthy rebound.

That post Produced some push backTherefore, I want to try a different strategy: compare the performance of S&P600 small-cap stocks, S&P400 mid-cap stocks and S&P500 large-cap stocks in 2021.

The S&P 500 index beat the S&P 600 small-cap stocks, but only by one point: 27.7% vs. 26.6%. This is not the kind of crazy underperformance you would expect to see in a narrow, top-driven market. Ironically, mid-cap stocks performed the worst at 23.6%. Note: Nearly 24% is generally considered a great year, but in 2021, it is a year behind.

If you want to see an example of a (selected) narrow market, where large-cap stocks outperformed small-cap stocks, look at 1998: The S&P 500 index rose by 26.7% (very similar to 2021), but the small-cap stocks are standard The Poole 600 Index actually fell 2.14%. That is a narrow market:

These charts tell the story of a broad rather than narrow market.

Before:
What does the equally weighted S&P 500 think of the top 5 stocks? (January 3, 2022)