U.S. Money Supply Just Completed a Massive 3-Year Reset, and It Could Usher in a Big Change in the Stock Market
The biggest trend of the last few years may be about to unravel.
Despite a rocky start to 2025, the stock market has helped make a lot of investors wealthier over the last few years. After climbing 24% in 2023, the S&P 500 (SNPINDEX: ^GSPC) followed up that performance with a 23% gain last year. In 2025, the benchmark index is down about 4% as of this writing. Still, that's a cumulative gain of 47%.
However, the years 2023 and 2024 also witnessed increased concentration in stock performances. Just 28% of the components of the S&P 500 outperformed the index last year, and just 27% outperformed it in 2023. Those are the two lowest readings dating all the way back to 1980. If you didn't have a lot invested in those stocks, your returns likely suffered.
But diversified investors might be getting some relief this year. After two years of intensifying concentration, the market is starting to broaden out. And one market indicator suggests that the trend could just be getting started.
