Once S&P 500 return is decomposed into factors 2024 really stands out.
“… What is particularly interesting about 2024 is how much of the S&P 500 return came from non-systematic (i.e., idiosyncratic) returns, driven by the significant appreciation of the “Magnificent Seven” (Mag-7), which now account for 35% of the S&P 500. Idiosyncratic returns are company specific and by definition should be uncorrelated and random.“
“In fact, idiosyncratic return has never contributed as significantly to the overall S&P 500 return as it has recently. Over the trailing 24 month period, idiosyncratic returns have accounted for 21% of the 51% return of the S&P 500.“
