In Reply to: Whatever you do don't check your 401Ks posted by russsmith on October 16, 2026 at 13:13:19
You have the wrong argument.
The Nasdaq is up 33.2% since Trump's inauguration on January 20, 2025, even after the recent market dip. That's a price gain, excluding dividends and dividend reinvestment.
I sold all my Nasdaq holdings because the market has become too concentrated. Roughly 60% of the Nasdaq Composite is represented by its ten largest companies, many of which are deeply interconnected through the AI industry: Nvidia, Apple, Amazon, Alphabet (Google), Microsoft, Meta, Tesla, Broadcom, Palantir, and AMD.
I'm already heavily exposed to AI through the S&P 500 holdings in my 403(b). I don't need to increase that concentration by holding even more of the same companies through a Nasdaq investment.
The bigger issue is that today's market gains are heavily concentrated in one interconnected industry: AI. These companies are investing in, supplying, and relying on one another. That creates the potential for a domino effect if AI spending slows, expected returns fail to materialize, or investor enthusiasm fades.
Look beyond the headline numbers, and the picture may be very different. If you exclude AI-related companies, I believe the remaining S&P 500 stocks may actually be down 2% to 3% this year.
In other words, the market's impressive gains may be masking weakness across much of the broader market. A rising index doesn't necessarily mean the overall market is healthy when so much of its performance depends on a single, interconnected industry.