The Distribution of Stock Market Concentration in the U.S. Over the History

More and more, a few mega-cap companies dominate the US stock market performance. Financial journals come up with different names for those stocks every few years. They are now called the “Magnificent Seven“, but we all remember FAANG, right? Naturally, several questions arise — Is the current status quo, when the stock market capitalization is highly concentrated among the few extremely large companies, an exception or rule over history? And what’s the impact of this concentration on the performance of the one particular factor — the Size premium? We present the research paper written by Emery and Koëter that tries to answer those questions.

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