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Historically, most of the S&P 500’s gains have come from the seven to ten largest companies.
According to Goldman Sachs, these companies have been able to grow their sales quickly and consistently.
Read here which eight stocks are expected to grow their sales and net income by more than 10 percent by 2025, according to investment bank Goldman Sachs.
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A popular piece of advice when investing in the stock market is to skip stock picking and invest in index funds. While this diversifies the portfolio and reduces risk, it can also represent a slower route to profit for traders with a shorter time horizon.
Year to date, the S&P 500 is up about 16.51 percent. Much of the rise can be attributed to just seven big tech stocks. According to a statement from Goldman Sachs on June 30, the heavyweights are up 58 percent – while the rest of the stocks are up 5 percent.
It is normal for a few to carry the majority. According to David Kostin, chief strategist for US equities, and his team, the top 10 stocks have consistently returned about 32 percent of the index’s median gains since 1995.
You might think that hindsight is always better. And that identifying those top performers in advance is easier said than done. But these stocks have one thing in common to which they attribute their success: an ability to grow sales quickly and consistently, the release notes.