A lot of the people I talk to about markets only pay attention to the big names. And almost every time, the word that comes up is "bubble," especially when they see the returns some of the top stocks have put up this year.
But zoom out and look at the market as a whole, and it's not doing too bad at all. What we preach as advisors is working exactly as it should.
See the chart below.
This is exactly why we hesitate when a client or prospect asks if they should invest in a single stock. It's too risky for our comfort, and honestly, we don't recommend single stock investing or claim any expertise in picking them.
The odds are stacked against you finding the next big winner. And even if you do, knowing when to hold and when to sell is a whole separate puzzle. Those "my buddy's sister invested in Apple in 2002 and still holds it" stories are far rarer than people think.
What's easier, safer, and still delivers strong returns? A diversified index fund like the S&P 500 shown above. I'm not saying you can't set aside some fun money for single stocks, just go in expecting the kind of swings you see in this chart.