The S&P 500—A House of Cards

Monday’s Plunge Wasn’t Just a Blip—It Was a Warning The so-called “Magnificent Seven” tech stocks have turned the S&P 500 into a dangerously concentrated bet, and Monday’s selloff should be a wake-up call for anyone blindly trusting their 401(k). If you think you're diversified by holding an S&P 500 index fund, think again. You’re not investing in 500 companies—you’re gambling on just a handful. And when the house of cards falls, it’ll take most Americans' retirement savings down with it. The Illusion of Diversification Most investors assume that an S&P 500 index fund spreads their risk across 500 different companies. That would be true—if the index were equally weighted. But it’s not. Instead, it’s weighted by market capitalization, which means…