In the last two years, investors have become familiar with the phrase “stock picker’s market.” The technical definition goes against the advice to “just invest in the SPY and forget it.” That’s because a fund seeks to replicate the performance of its underlying index. However, in a stock picker’s market, the biggest gains are concentrated in a few stocks.
Retail investors only need to look at retail stock to get a practical example of a stock picker’s market. Heading into 2025, three companies control 17% of all U.S. retail sales. That’s up from about 11% in 2024. These companies have a loyal customer base, a strong (or growing) e-commerce presence, and are swimming in cash to fuel future growth.
