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Week 3: Slay It Up – Stock Diversification
This week it’s time for you to learn how to craft a suitable mix of investments. Diversification and asset allocation help you build a foundation for investing in the stock market. This is a great place to start if you are a beginning investor or would like a refresher if you have already started on your investing journey
Magnificent “7”
In 2023, a set of powerful tech companies, known as the ‘Magnificent 7,’ stood out in the stock market. These companies are giants in the tech world and include Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), Amazon.com (AMZN), Meta Platforms (META), Tesla (TSLA), and Nvidia (NVDA). These seven companies that collectively delivered an impressive average return of 111% in 2023, far outpacing the broader S&P 500, which had a 24% return. This means that if you had invested in these Magnificent 7 stocks, you would have seen significant gains on your investment.
Day 16 – Hot Stock Picks
According to financial experts like Daniel Dusina, who is a Chartered Financial Analyst (CFA) and chief investment officer at Blue Chip Partners, these companies are notable for their strong earnings growth. They are among the top performers in the large-cap domestic stock category, and many of them are involved in businesses that are part of long-term trends.
However, it’s important to note that even these impressive stocks faced challenges in the past. In 2022, all seven of these companies experienced double-digit percentage losses. This reminds us that no stock is completely invincible, and the market can be unpredictable. So, as you start your investing journey, it’s crucial to be aware of market conditions and not put all your money into just a few stocks.
Diversification, which means spreading your investments across different types of stocks and industries, is a key strategy. This helps protect your portfolio from the ups and downs of individual stocks. So, while the Magnificent 7 had a stellar year in 2023, it’s essential to approach investing with a well-balanced and diversified mindset to navigate the ever-changing market.”
Today’s Investing Activity: Today’s activity focuses on identifying a group of high-growth stocks, the Magnificent “7” and each company’s return for the previous year. to add to your portfolio.
Complete the chart below to see why these stocks have been coined the “Magnificent 7”.
| Company | Ticker |
% Return – 1y |
| Apple | AAPL | |
| Microsoft | ||
| Amazon | ||
| Meta | ||
| Tesla | ||
| Nvidia |
Tomorrow: Day 17 – Asset Allocation Defined
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Happy Investing!
Cassandra