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Eight much-loved stocks that investors should worry about

Just as Wall Street is being pushed higher by a small group of very big stocks, ASX investors have crowded into a handful of “diamond defensives”. 

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There’s wisdom in crowds, or so the old market saying goes. But a growing chorus of experts is warning that the way ASX and Wall Street investors have crowded into a select group of large companies could mean this year’s equity market rallies are built on shaky ground.

The phenomenon of crowding is most pronounced in the US where the S&P 500, considered the global proxy for risk assets, is being driven by a remarkably small number of stocks.

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James Thomson is senior Chanticleer columnist based in Melbourne. He was the Companies editor and editor of BRW Magazine. Connect with James on Twitter. Email James at j.thomson@afr.com

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    Original URL: https://www.afr.com/chanticleer/eight-much-loved-stocks-that-investors-should-worry-about-20230509-p5d70v