The Mathematical Trap

I can't look at the major indexes and not think of how Apple and Microsoft are performing relative to the index, given they are hitting their natural limits in growth funds. Take all the complexity out and look at it from 50,000 feet. The market has peaked. There is too much money concentrated in a small segment of global assets. Stocks like ARKK can rally, but they aren't going to impact passive and active growth indexes that mainly hold large caps. Stocks like Apple have to be sold or cannot take on new money from funds, and the indexes over own these stocks. The major indexes will fall if investors try rebalancing en masse, and that will in turn trigger selling in funds like ARKK whether warranted or not. See: Apple is Doomed and Apple and Microsoft Hit Their Natural Limits for more discussion.