Today's 'Magnificent Seven' stocks are destined to ride off into the sunset

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It’s unlikely that the largest companies now will dominate the stock market in a decade

“ “Whoever coined the expression ‘Magnificent Seven’ for these companies presumably didn’t see the movie.””

But we have a good idea which companies won’t be on that list: today’s Magnificent Seven — Microsoft MSFT, +2.35%, Apple AAPL, +1.87% Amazon.com AMZN, +2.94%, Nvidia NVDA, +3.79%, Alphabet GOOGL, +1.91%. Meta Platforms META, +3.51%, and Tesla TSLA, +2.40%. These are the results of research conducted by Research Affiliates, the investment firm headed by Robert Arnott. He and fellow researchers focused on the 10 largest-cap companies at the beginning of each decade since 1980. They found that, on average, eight of those 10 were gone from the top-10 list by the end of that decade. Furthermore, the average 10-year performance of all 10 was significantly below that of the overall U.S. market.

 

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