Most Valuable Companies in the USA Compared to the Total Market Capitalization

I was curious to know how much of the total market capitalization the largest companies represented. An easy way to do this (even if it might be a tiny bit off) was to use the Vanguard Total Market fund ($VTI), so this is what I did (I also decided to look at the % in the S&P 500 also, $VOO).

Apple 6.2% of total market and 7.1% of S&P 500.

Microsoft 6.2% and 7.1%

Alphabet 3.3% and 3.9%

Amazon 3% and 3.4%

Nvidia 2.3% and 2.9%

Meta 1.6% and 1.9%

Berkshire Hathaway 1.5% and 1.8%

Tesla 1.3% and 1.6%

UnitedHealth Group 1.2% and 1.4%

In general investing in low cost index funds (like Vanguard’s index funds) is a very sensible strategy. I personally invest mostly in individual stocks. I see stocks such as Microsoft and Costco that are attractive businesses to invest in but the stocks are so costly I hesitate to invest. In addition, I already am over-invested in mega-cap companies (my largest holdings are Apple, Alphabet and Amazon, about 36% of portfolio). So avoiding other mega-caps makes some sense to me. Of course, I have missed out on large gains by Microsoft over the years by not investing in it.

One reason I decided to look at this was to get a baseline of a total market portfolio. One of the things I am considering is say buying a bit of Microsoft but still underweight that investment. Say I was 2% invested in Microsoft that would still leave me “under-invested” in Microsoft. I have been still some of Apple and Alphabet over the last few years (in pretty small amounts). I have invested those proceeds mainly in smaller, fast growing companies or good businesses that have stocks trading at good values. As I sell more of Apple and Alphabet I may consider buying some other megacaps. The one I have bought a little bit of is Berkshire Hathaway.

10 year chart of stock prices for Apple, Alphabet, Amazon and Microsoft (2013 to 2023)

10 year returns Apple (up 1.068%), Alphabet (up 424%), Amazon (up 693%) and Microsoft (up 1,090%)

FYI, the total USA market index fund (VTI) was up 187% for the same 10 year period and the S&P 500 index fund (VTI) was up 204%.

Related: The 20 Most Valuable Companies in the World (May 2017)Stock Market Capitalization by Country from 1990 to 2010Stock Market Capitalization by Country from 2000 to 2016The 20 Most Valuable Companies in the World (October 2014)