Will the Magnificent 7 keep shining in 2025?

*This content is brought to you by Brenthurst Wealth .By Renee Eagar*.If you've been watching the stock market, you've probably heard a lot about the Magnificent 7 – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. These big tech companies led the charge in 2025, making up a substantial part of the market's growth. .Just these 7 stocks currently make up about 33% of the index, these 7 stocks alone were responsible for more than half of the S&P 500's 25% in 2024. But if you were to take them out, the rest of the market only grew by about 11.8% in USD terms over the same period. After such a strong run, you might be wondering – should I still invest in them, or is it too late? .This is a question that professional and casual investors constantly ask because the wrong decision and trying to time these moves can destroy the value and the balanced within your portfolio over time..FOMO versus fundamentals.The story of their share prices soaring is a great lesson in how to think about your investments. Because it's easy to get caught up in the excitement when you see stocks making such huge gains. But just because something's gone up doesn't mean it will keep going up..Time and again I've watched as investors fall into the trap of chasing what's already performed well and it is indeed human nature to always want the best. But history shows that markets don't move up in a straight line, and the stocks that soar the highest can also fall the hardest. .In my experience and in reality the average investor enjoys the 20 percent on the upside but cannot stomach the 20% down, a persons risk profile plays a critical part in this equation and any advisor worth their salt so to speak will help you maintain a balanced approach taking your needs and objectives into account..If your retirement plan is built around maintaining financial security, you need to ask yourself: Are you investing based on a sound strategy, or just trying not to miss out?.For South African investors, the stakes are always high. A weakening and volatile local currency makes offshore investing a necessity. The chances are you if you are an investor you are already exposed to the Magnificent 7 already and would I exclude them from a portfolio……most definitely not but one needs to understand the risks involved..The illusion of safety.The biggest companies in the world might seem like the safest bets. After all, they dominate their industries, make billions in profits, and drive innovation..But their size doesn't mean their share prices won't fall. High-growth stocks can be volatile, and when market sentiment shifts, their share prices can drop sharply. .This was clear to see earlier this year when markets reacted to the news that Chinese AI tool DeepSeek was a true rival to established players like OpenAI. The announcement led to significant sell-offs in major tech stocks, with companies like Nvidia experiencing substantial market value losses..Volatility in popular tech stocks is nothing new. During the dot-com boom, investors piled into the biggest tech names, believing they couldn't lose. When the market corrected, many of those stocks took years to recover – some never did. .While today's Magnificent 7 are stronger businesses, their stock prices are still subject to the same forces of speculation, hype, and corrections..Balance beats momentum.This doesn't mean you should avoid the Magnificent 7 entirely. They will almost certainly continue to play an over-sized role in the economy and markets. But if you're relying too much on them for your financial future, you may be taking on more risk than you realise..A well-balanced portfolio spreads risk across different industries, asset types, and regions. That way, if one part of the market stumbles, you're not left exposed. Investing isn't about reacting to what's hot today – it's about making sure your wealth supports you tomorrow..Final thoughts.Markets go through cycles. The stocks that led one year aren't always the ones that lead the next. The Magnificent 7 have had an extraordinary run, but its time for the broader market to show some growth which has already started happening over the last 6 months and depicted in the graph below..If your focus is on building a retirement fund that lasts, take a step back and make sure you're investing with a clear strategy, not just emotion. FOMO can be costly, but fundamentals will always matter in the long run..* Renee Eagar, Certified Financial Planner®, is head of Brenthurst Wealth Claremont, Cape Town renee@brenthurstwealth.co.za.Read also:.The risks of semi-nomadic lifestyles and cessation of tax residenceHow to choose the best investment vehicle for your goalsSmall money habits can produce big results

Will the Magnificent 7 keep shining in 2025?

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