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Massive Companies Tend To Get Cut Down To Size

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By Craig Erwin, Ph.D.

Apple is a great company, but Apple’s stock price puts the company’s value at nearly $3 trillion. Apple and the other nine largest members of the S&P 500 make up almost 30% of the S&P 500’s value. When companies get as massive as Apple, things usually don’t end well; one way or another the company tends to shrink in value, whether quickly and violently or slowly and steadily. So, when a company becomes exceptionally large or richly valued like Apple, its value tends to fall, regressing to the mean until it is valued at or below the value of the average company. A company can only become so massive before the market prunes it and cuts it down to size.

Are you concerned that some companies are becoming too massive? How are you investing in the stock market? Are you confident that your investing method will enable you to accumulate enough wealth to retire?

For more information on the stock market, investing, and retirement, click on the links below:

Don’t Bet On Experts’ Short-Term Forecasts
There Is No Debate; Just Keep Buying Stocks
A Recession Can Be Your Best Friend
Don’t Pay Money Managers Who Can’t Beat The Indexes

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