As the stock market has shown incredible giant resumes, a handful of names keps dominating the market by spearheading growth and establishing public caps. These so-called mega cap names represent industry giants such as Apple, Microsoft, Amazon, and Alphabet.
These four technology firms alone account for a collective market capitalization of more than $7 trillion, and out of the total market cap a whopping 20% is attributed to them.Plus, in 2020 the stock market performance of these four have appreciated significantly, possibly even more than what was expected from them.
Why is this such a surprising discovery? It’s simple. Mega cap names are essentially the behemoths of the stock market. As market values continue to rise and fall, these stocks remain unaffected and even continue to show steady growth. This means that these mega cap names serve as a secure and reliable investment option even during a market volatility.
Not just that, but mega cap names also bring in obvious benefits to their investors. These names typically have strong reputations among stakeholders and have established trust and loyalty across the stock market. Because they have been able to sustain their dominance for so long, they bring in promising returns throughout the year.
Plus, mega cap names have had years to establish and maintain relationships with their suppliers of goods and services. Additionally, their revenues are mostly spread out over multiple countries and various products. This means that the risks associated with them are greatly reduced providing a strong and steady flow of income, which no doubt brings in higher returns.
Whatever the case may be, the dominance of mega cap names is sometimes too difficult to ignore. Their influence and presence in the stock market is extremely hard to ignore as they bring in steady returns regardless of market volatility. Even during times of uncertainty, the likes of Apple, Microsoft, Amazon, and Alphabet continue to show stead growth, and in 2020, the performance of these names was a testament to that.