Investing in large-cap growth stocks, particularly the Magnificent Seven, has generated significant returns, exemplified by a $10,000 investment growing to $32,000 in the S&P compared to $25,000 in an equal-weight approach. This trend marks the nine-year dominance of mega-cap stocks, but past performance should not lead to complacency. Historical data indicates that periods of substantial outperformance by the S&P 500 typically precede periods of greater underperformance, suggesting that market conditions will inevitably shift. The pattern observed shows that after significant outperformance, the S&P 500 tends to underperform relative to equal-weight indices over the following three to five years. Investors need to recognize and prepare for the possibility that what has been true for nine years may not continue indefinitely.

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