Nvidia Stock Is Up 174% This Year. That's a Big Problem for the Average S&P 500 Stock (and Some Investors).
Nvidia (NASDAQ: NVDA) has returned 174% in 2024, and its market capitalization has increased from $1.2 trillion to $3.3 trillion. Meanwhile, the S 500 (SNPINDEX: ^GSPC) has returned 15% and its market capitalization has increased from $40 trillion to $46 trillion. Put differently, Nvidia is responsible for more than one-third of the gains in the S 500 this year.
As a result, the average S 500 stock trails the index by 10.7%, the worst underperformance since 1990, according to The Wall Street Journal. That means investors without exposure to Nvidia have found it exceptionally difficult to beat the market this year.
Investors can learn a few important lessons from the situation, and they can take steps to avoid a similar problem in the future. Read on to learn more.
Source Fool.com