In this episode of Market Movers, we dive into the current state of the stock market, particularly focusing on the concentration risks posed by the top companies in the S&P 500 and Russell 1000. With the top 10 companies accounting for a significant portion of these indexes, we discuss the implications for investors relying on index-based strategies.
Remy Blaire is joined by Heather Brilliant, CEO of Diamond Hill, who shares her insights on the importance of a valuation-disciplined approach in active portfolio management. They explore the opportunities and risks associated with small and micro-cap companies, which are often overlooked by analysts, presenting potential for significant returns.
As we navigate the final quarter of 2025, they also touch on the impact of the U.S. government shutdown on economic data and the pricing of risks in consumer-oriented asset-backed securities. Heather emphasizes the need for investors to understand the risks associated with their holdings, especially in light of the current exuberance in the market driven by AI and tech stocks.
They conclude with a discussion on diversification, highlighting that a well-diversified portfolio can be achieved with a limited number of holdings, contrary to the concentration seen in major indexes.