A correction may already be underway. The outsize government role that Mr. Trump is allowing Tesla’s chief executive, Elon Musk, to play might be amusing for both of them, but it has spelled serious financial trouble for Tesla shareholders, including many ordinary people invested in index funds. In the past month alone, Tesla stock has lost nearly a third of its value. And as a charter member of the Magnificent Seven, Tesla’s fall has exacerbated the decline and the volatility in the equity markets during the past seven weeks, given the revamped market structure. Tesla was great to own on the way up, of course, but there’s plenty of pain to go around now that it appears to be a falling knife.
Now might be a good moment to check on your retirement funds, because what you may have thought were safe index funds are actually tilted heavily toward the biggest and baddest technology stocks. And they could be suddenly facing a financial reckoning.
Top 10 holdings of VOO:
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