*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
Megan joined the Brenthurst Wealth team in March 2026 as an Administrative and Fiduciary Services Assistant at our Val de Vie Office in the Western Cape. Prior to joining Brenthurst, Megan gained three years of experience in the retail sector, where she developed management and client service skills.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Esmarelda Isaacs-Andreas joined the Brenthurst Wealth Stellenbosch office in October 2025, taking on the dual role of Receptionist and Fiduciary Administrator.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Ashley joined Brenthurst Wealth in January 2025 as Office Administrative Assistant and Receptionist for the Stellenbosch Office.
René Heystek joined Brenthurst Wealth in November 2023, as receptionist and administrative assistant in the newly established George/Garden Route office.
Michelle Heystek has built a career in the financial services over the last two decades, after obtaining her B.Com degree in Financial Management in 2005. Once she joined Brenthurst in 2006, she continued her academic journey, obtaining her Certificate in Wealth Management from INSETA in 2007, followed by a Postgraduate Diploma in Financial Planning from the University of the Free State. In 2008, she earned the Certified Financial Planner (CFP®) designation.
Anelle joined Brenthurst Wealth as a Receptionist and Administrative Assistant to Brian Butchart in the Cape Town office in December 2023. She has a wealth of knowledge from working as a liaison between Financial Advisers and clients at TMA and Absa Investment Management Services (Aims) since 1998. She obtained her B. com degree from the University of Port Elizabeth in 1997.
ADMITTED ATTORNEY | FINANCIAL PLANNER & HEAD OF BRENTHURST FOURWAYS
Sanet was appointed in April 2020, joining our Cape Town team as an Executive Administration Assistant to Renee Eagar. She has been in the financial services industry since 1990. Her previous experience includes positions at Sanlam, BJM and ABSA. She spent her last 12 years working at Alexander Forbes Private Client Wealth as a Senior Wealth Management Assistant. She has received numerous accolades over the years which include but not limited to, Alexander Forbes Client Service Excellence – Silver award in 2014,2015 and 2017. Sanet has also obtained her Certificate in Wealth Management (NQF 5) in 2012 and achieved “Best Student of the Year” from Moonstone.
Maria Smit is a Certified Financial Planner® with over 10 years of experience in the financial planning industry.
