Look
US market concentration – size and earnings disconnect.
What’s striking about these graphs is how sharply the market capitalisation of the top 10 US stocks has grown compared to their actual earnings contribution. The top 10 stocks currently represent 37% of market weight but only 28% of earnings.
This disconnect is one of the largest seen since 1970, highlighting a level of market concentration that has historically been rare and often unsustainable. While past episodes (like in 2000 and 2020) saw either earnings catch up or prices collapse, today’s surge appears more speculative, driven by price momentum rather than earnings growth.
If the trend of the last decade continued, the top 10 would theoretically account for 73% of the market. This is an unlikely scenario that underlines the fragility of such extreme concentration. Historically, when the market becomes top-heavy, the rest of the market (the "bottom 490") tends to outperform over the next five years, reminding investors that diversification matters most.
Date Range: 12/31/1964 to 12/31/2024. Represents the top 10 stocks based on market cap from the largest 500 US stocks. Source: Compustat. Calculation: Hartford Equity Modeling Platform.
Top 500 based on the 500 largest US stocks. Chart uses current weights and past 10-year returns and applies them for 50 years into the future. Past performance does not guarantee future results. Source: Compustat. Calculation: Hartford Equity Modeling Platform.
Listen
Silent, deeply troubling crisis in South Africa
The explosive growth of sports betting is now estimated to exceed R1 trillion annually. This figure, equivalent to nearly a quarter of household income, reflects a surge not rooted in entertainment, but often in desperation. Many South Africans bet to cover basic needs, such as rent and school fees. Yet this wave of gambling delivers little back to the real economy and devastates lives, as shared in this news podcast.
Money spent on food, healthcare, or education supports jobs and communities, but money spent on sports betting vanishes into corporate profits, yielding minimal economic benefits or employment opportunities.
I would guess that most of these profits make their way offshore. As the industry embeds itself into local sports and culture, it shifts household spending, leaving behind broken families, mental health fallout, and a dangerously normalised addiction. Even more alarming is that the gamification of betting appears to appeal to children, and we have seen a significant increase in betting among schoolchildren.
To address this, the country needs urgent and firm intervention. Regulatory measures, such as higher taxes, advertising restrictions, sponsorship bans, identity checks, and betting limits, could help curb some of the worst harm. As a society, we need to find ways to remove glamour from betting. We need to encourage schools and workplaces to teach financial literacy and emphasise the importance of saving over speculation.
You can read more here.
If you are affected by harmful gambling or are suffering distress or despair you could speak to a health professional, or an organisation that offers support.
Learn
The rise of the female investor
Women are now controlling a growing share of global assets, estimated at $60 trillion in 2023 and projected to rise significantly by 2030. The shift of wealth toward women is being driven by a powerful combination of social, economic, demographic, cultural and longevity-related forces. Together, these trends are reshaping who holds financial power and how advice needs to be delivered.
Socially, women are marrying later, divorcing more frequently, or choosing not to marry at all, which leads to greater financial independence. Economically, they are outpacing men in education and increasingly holding higher-paying jobs, allowing them to build and control more of their own wealth.
Demographically, a significant portion of assets is concentrated among baby boomers, many of whom are now transferring wealth to younger generations or surviving spouses. And critically, women tend to live longer than men.
This means that even when wealth begins in male hands, it often ends in female ones. As widows or daughters, women are inheriting and managing wealth for longer periods, often alone. Culturally, growing financial confidence and changing attitudes are also empowering more women to take charge of their financial futures, expecting not just to be included, but to be respected, informed, and actively engaged in the decision-making process.
Yet the financial services industry has been slow to catch up. Too often, women are still treated as secondary participants in their own financial lives. Unfortunately, many advisors still default to serving the male partner in a household, neglecting to build trust and relationships with women, especially younger ones.
As a small, independent financial planning business that began with just two advisors, we’ve grown to a team of ten, proudly diverse and entirely female. Today we are one of South Africa’s largest female-owned IFAs. Although we never intended to be a female-only team, it has helped to attract a predominantly female client base.
We find ourselves uniquely positioned to serve women who are seeking financial advice that truly resonates with their values, goals, and lived experiences. Women often look for more than performance. They don’t seek special treatment. They want advisors who genuinely understand who they are and what matters to them.
Ponder
In this section, I invite you to think about a question I may pose or a thought I may share.
Oenophilia
“Oenophilia simply refers to enjoying wine, often by laymen.”
Craig and Carla Hawkins of TESTALONGA have captured the essence of what makes the northern Swartland so captivating. TESTALONGA is known for their low-intervention, vineyard-first approach where it seeks purity, precision, and brightness. They only work with sites that are farmed without the use of herbicides or pesticides.
Among the standout wines this year is the TESTALONGA El Bandito 'Cortez' Chenin Blanc 2024. Sourced from a 1972 vineyard on the Paardeberg, this is Craig’s favourite site to work with. He changes the label every year to reflect the unique character of the vintage, he says, “to best suit the feeling the wine is giving”.
The 2024 wine is aromatic, with notes of potpourri, herbs, lime, and peach. Nice body for a white wine in winter. I paired it with a hearty chicken soup.
Stay curious,
Elke Zeki