In Hindsight : What If You Only Bought the Top 5 US Mega-Caps for the past 10 years?

Over the past decade, the U.S. stock market has been defined by an unprecedented concentration of power. A handful of mega-cap companies — Apple, Microsoft, Amazon, Alphabet, Meta, Tesla, Nvidia, Berkshire Hathaway. They have grown so dominant that they often seemed to carry the entire market on their backs.

What if, instead of owning the full S&P 500, you had only invested in the five largest U.S. companies by market cap each year from 2015? Would you have retired richer, or would you have risked it all on a fragile strategy?

TLDR: If you only invested in the top-5 U.S. mega-caps each year from 2015 to 2024, you would have outperformed the S&P 500. But with sharper ups and downs.

• AAPL, MSFT, and GOOGL dominated the portfolio and driving most of the returns.
• Late entrants like NVDA contributed less than expected, since they only entered the top-5 in 2023–2024 (after much of their growth).
• META’s “in-and-out” appearances meant a smaller stake, missing some of its compounding years.
• Diversification (SPY) delivered steadier growth with fewer nerve-wracking drawdowns.

In Hindsight: “Top-5 only” strategy can supercharge returns, but it’s fragile. Concentration of force wins battles, until the leaders stumble.

What If You Were Saving for Retirement in 2015 with only 10 years?

Imagine it’s January 2015. You’re 50 years old, aiming to retire in 10 years (2025). Each year, you can set aside $10,000 toward your future.

Now you face two very different paths:

• Strategy A – Broad Diversification (SPX): You spread that $10,000 across the entire S&P 500, owning all 500 “platoons” of the market army. It’s steady, balanced, and designed to protect you from relying too heavily on any single company.
  
  
• Strategy B – Concentration of Force (Top 5 Mega-Caps): Instead of the whole army, you commit only to the five largest companies by market cap each January. That means $2,000 into each, holding them for good and never selling. You’re betting your retirement on the elite few — the generals leading the charge.

In this article, we will let this scenario play out and examine its end state. 

The Outcome (Hypothetical Numbers)

By the end of 2025:

• The SPY portfolio grew 221.24% – which means, you will have a portfolio value of $221,240 by the end of 10 years of compounding $10,000 annually. (steady, diversified growth).
  
  
• The Top-5 portfolio performed an astounding 405.41%. After 10 years of compounding you will have $405,410. (supercharged by Apple, Microsoft, Amazon, Alphabet, and Berkshire Hathaway — but with sharper ups and downs).
  
  

This is concentration of force in action, staking your retirement on the five strongest “platoons” in the market. When they march forward, you look like a master strategist. But the trade-off is fragility: one decisive setback, a tech crash, regulatory blow, or unexpected disruption — can turn brilliance into disaster. 

Looking back, the results seem genius; living through it would have felt far less certain.

Why This Matters

This isn’t just theory. For anyone saving for retirement, the dilemma is real:

Do you mass your forces on the dominant winners for maximum firepower?

Or do you deploy the full army across all 500 companies for greater stability?

Let’s Go In Depth – Defining the Experiment

Here’s how the thought experiment was set up:

Selection Rule: Every January, look up the five largest companies by market capitalization in the S&P 500. These are the reigning “generals” of Corporate America.

Contribution: Invest $10,000 each year. Split evenly as $2,000 into each of the top five.

Holding Rule: Once bought, shares are never sold, even if the company later falls out of the top 5.

Funding Horizon: Stop adding new money after 10 years and evaluate the portfolio at retirement.

For comparison, we stack the results against: SPY The classic S&P 500 ETF, which automatically adjusts to market-cap weights.

How does the portfolio end up looking?

By 2025, the experiment produces a portfolio dominated by three persistent giants:

• Apple (25.4%), Microsoft (24.6%), and Alphabet (21.5%) — together making up ~71% of the portfolio. These were the unshakable core, present every single year from 2015 through 2024.

The rest of the allocation is spread thinly across “rotating entrants”:

• Amazon (10.1%) — a consistent member after 2017, but never able to catch up with the Big 3.
• Berkshire Hathaway (6.6%) — strong early weightings (2015, 2016, 2018, 2022), now a steady but smaller slice.
• Meta (6.3%) — entered only in 2017, 2019, and 2020. Its in-and-out status meant you never accumulated much, despite its long-term compounding power.
• Nvidia (3.1%) — the late bloomer. By the time it entered the top 5 in 2023, most of its meteoric run was already behind it.
• ExxonMobil (1.6%) — featured only in 2015 and 2016, reflecting when oil majors still ruled the top ranks.
• Tesla (0.8%) — a one-shot 2021 entrant, representing the hype cycle of EV mania.
  
  

Allocation of Companies and their unrealised gains

Regime Highlights

• 2015–2020: The heavy lifting came from Apple, Microsoft, Amazon — reliable compounders that carried the portfolio.
  
  
• 2022: The tech selloff exposed the risk of concentration — META, Amazon, and Alphabet stumbled, dragging down the entire basket.
  
  
• 2023–2025: Nvidia’s AI surge gave the portfolio a late boost, but its small allocation meant it couldn’t dominate like it did for early investors.

Companies Added by Years (2015 - 2024) 

Takeaway from how the portfolio ended up looking

• Persistent Core: AAPL, MSFT, GOOGL never left. They absorbed ~70% of contributions and are the backbone of performance.
  
  
• Early Incumbents: XOM reminds us that in 2015–2016, energy and financials still mattered, until tech dominance overwhelmed them.
  
  
• In-Out Players: META’s patchy appearances meant you under-owned one of the era’s best compounders.
  
  
• One-Shot Entry: TSLA highlights how hype can briefly propel a stock into the top 5 — but without sustained presence, it ends up negligible even though TSLA offered extremely high growth through the years.
  
  
• Late Bloomer: NVDA shows the penalty of joining the leaders late. By the time it was in the top-5, the asymmetric gains were mostly in the rear-view mirror.

The Bull Case for Top-5 Only

When you study the past decade in the markets, it becomes difficult to argue against the dominance of the U.S. mega-caps. Apple, Microsoft, and Alphabet were not just large companies. They were relentless compounders of earnings, cash flow, and influence. 

The story here is familiar: a handful of names did most of the heavy lifting, just as Exxon and GE once did in earlier decades. What’s striking, however, is the duration of their dominance. Unlike the fleeting leaders of the past, Apple and Microsoft reinvented themselves multiple times, extending their lifespans at the top.

In this experiment, that persistence is exactly what made the strategy shine. Roughly 70% of the portfolio ended up concentrated in those three names — and they rewarded the discipline handsomely, with gains north of 250–300%. The market likes to talk about diversification, but the reality is that wealth has always been concentrated. 

Bessembinder’s research showed that a tiny sliver of stocks accounts for the bulk of long-run market returns. Through the 1987 crash, the dot-com bubble, and the global financial crisis, the same pattern played out repeatedly: the index rises on the backs of a chosen few, and the rest are passengers. This decade was no different.

Warren Buffett has often said that investors don’t need dozens of stocks to build wealth. In fact, alongside Charlie Munger, he argued that owning just three outstanding companies  bought at the right price and held patiently can make you very rich. The key, in their eyes, isn’t diversification for its own sake, but focus on quality and discipline over time.

This philosophy mirrors what we see in the top-5 experiment. Decade after decade, most of the market’s gains are driven by a select few giants. 

The virtue of the top-5 strategy is that it forces capital into those winners year after year, without flinching. Apple, Microsoft, and Google never left the top ranks, so contributions kept compounding in the very businesses that deserved it. And when new leaders emerged, Meta during its social-media ascendancy, or Nvidia in the AI boom. The portfolio naturally tilted toward them. You didn’t capture their earliest gains, true, but you didn’t miss them entirely either. That’s the quiet advantage of concentrating on the largest players: you may arrive late, but you still arrive.

“NEVER SELL WINNERS”

Looking back from the vantage point of 2025, the results look almost inevitable. Concentration of force worked not by chance, but because the strongest platoons kept marching forward. 

The Bear Case for this strategy

Let’s speak with some honesty now shall we? The uncomfortable truth is that if you pitched this strategy back in 2015, most people would have called it reckless. You were essentially betting your retirement on a single theme. 

Big Tech and, later, AI with over 70% of contributions funneled into just three companies. The portfolio lived and died with Apple, Microsoft, and Google. That kind of concentration looks brilliant in hindsight, but at the time it looked like a dangerous lack of diversification.

History provides plenty of warnings. In the 1980s and 1990s, GE was the ultimate “can’t miss” stock; in the 2000s, Exxon was untouchable at the top of the market cap table. IBM and Cisco were once considered indestructible leaders. Yet each of them eventually stumbled. A rules-based “top-5 only” investor would have been left holding far too many of them, long after the market had moved on. That is the inherent fragility of concentration.

You also sacrifice the psychological benefits of diversification. When tech sold off in 2022, the portfolio had nowhere to hide. That is why the risk metrics looked so poor: the volatility was high, and the extra return didn’t come close to compensating for the stress of holding such a lopsided basket. You’ve to really believe in it… 

And then there is the issue of timing. Because the rule forces you to allocate to the current giants, it front-loads dollars into the persistent leaders while underweighting the late bloomers. Nvidia is the perfect case in point. By the time it finally entered the top-5 in 2023, its rocket ride was well underway. Only ~4% of contributions ever went into it — hardly enough to move the needle.

The irony is clear: by buying only today’s winners, you guarantee exposure to the market leaders, but you often miss the most explosive part of their journey. The trade-off is structural. Concentration gives you power, but the rules strip you of flexibility. And for an investor living through it in real time, the first few years of slow progress (2015–2018) and the drawdowns of 2022 would have tested conviction to its core when you underperformed the market.

Interesting Findings of this experiment 

The Silent Performer 

The outcome of this exercise shows just how much the portfolio depended on a small circle of companies.However, Berkshire Hathaway stands out as an unexpected heavyweight. Despite only appearing in a handful of years, its long-term compounding made it one of the portfolio’s sturdier contributors — a reminder that old-economy businesses can quietly deliver while the spotlight shines elsewhere.

Concentration in the S&P500

The rise of Big Tech has pushed the S&P 500 into one of the most concentrated periods in modern market history. 

Sources: Bloomberg, Apollo Chief Economist

Since 2015, the S&P 500 has become increasingly concentrated, with the top 10 companies’ share of market cap climbing toward 40%. Big Tech’s dominance meant that a handful of names drove most of the index’s gains. This structural shift helps explain why a concentrated approach — focusing on the top-5 mega-caps worked so well over the past decade: the market itself was already moving in that direction.

Risk and Reward 

In hindsight, the portfolio beat the market in 56% of the months, leaving the S&P 500 ahead the other 44% of the time. On the surface, that looks like a respectable win rate. But risk isn’t just about tallying victories — it’s about how efficiently those returns are earned.

When measured through risk-adjusted metrics like the Sharpe and Sortino ratios, the concentrated strategy breaks down. The volatility was higher, the drawdowns sharper, and the “extra” return per unit of risk alarmingly low. In other words, while the portfolio looked like a winner half the time, it often felt like a rougher ride than the index — a reminder that raw outperformance and risk-adjusted success are not the same thing.

Risks metric of the concentrated of force portfolio

That’s where risk metrics come in:

• Beta (1.05) shows your portfolio moves more than the market. Basically more upside when things go well, but sharper swings when they don’t.
  
  
• Sharpe ratio (0.23) and Sortino ratio (0.38) are “efficiency scores”. They measure how much return you earned per unit of risk. Here, they’re alarmingly low, meaning you took on volatility without getting much extra reward.
  
  In other words, the concentrated route can feel thrilling and potentially very lucrative but it’s fragile. The diversified path is slower, steadier, and built for peace of mind.

Closing Summary 

Every cycle anoints a handful of giants, and concentrating on them can look like genius provided you were early and relentless in adding to them. This strategy didn’t chase tomorrow’s upstarts; it doubled down on today’s incumbents. Apple, Microsoft, and Google soaked up the bulk of the dollars, while Nvidia and Meta were underfed by the time they qualified. Over 2015–2025, it worked because the kings kept reinventing themselves and compounding carried the day. But the next decade may not be so forgiving and it could be the cycle where a broader buffer, like a top-10 basket or a momentum tilt, makes the difference between looking brilliant and looking reckless.

“Concentrating on kings can make you look like a genius, until the crown passes to someone new.”