1.Executive Summary
This report presents a detailed analysis of the performance of the 'Magnificent 7' stocks, the S&P 500, and the Indonesia Stock Exchange (IHSG) over the past 20 years. The analysis covers annual returns, volatility, risk-adjusted returns, and the impact of major economic events.
The 'Magnificent 7' have demonstrated significant growth, especially in the last decade, often outperforming the broader S&P 500 index (Visual Capitalist). In contrast, the IHSG's performance has been shaped by macroeconomic factors and foreign fund flows (Atlantis Press).
The report also examines divergence within the 'Magnificent 7', with companies like Nvidia and Tesla experiencing rallies, while Apple and Amazon have faced declines (Investors). The S&P 500, while generally stable, has been impacted by broader economic trends and policy shifts (S&P Global).
2.Key Findings
2.1 Performance Metrics
2.1.1 Annual Returns
- The 'Magnificent 7' stocks have consistently outperformed the S&P 500, particularly in the technology sector, driven by innovation and market dominance (Visual Capitalist).
- The IHSG has shown variable returns, influenced by domestic economic policies and global market trends (Atlantis Press).
2.1.2 Volatility
- The 'Magnificent 7' stocks exhibit higher volatility compared to the S&P 500, reflecting their growth-oriented nature and sensitivity to market conditions (Investors).
- The IHSG's volatility is affected by macroeconomic factors and investor sentiment, with foreign fund flows playing a significant role (SAGE Journals).
2.1.3 Risk-Adjusted Returns
- Risk-adjusted return metrics such as the Sharpe Ratio indicate that the 'Magnificent 7' stocks offer higher returns for the risk taken compared to the S&P 500 and IHSG (QuantifiedStrategies).
2.2 Impact of Economic Events
- Recent economic events, including interest rate changes and geopolitical tensions, have significantly impacted performance. The 'Magnificent 7' have shown resilience, with some companies like Nvidia and Tesla benefiting from market conditions (Reuters).
- The IHSG has been more susceptible to domestic economic policies and global economic shifts, affecting its comparative performance (Atlantis Press).
3.Comparative Analysis
| Metric | 'Magnificent 7' | S&P 500 | IHSG |
|---|---|---|---|
| Annual Returns | Higher growth | Stable, broad market | Variable, policy-driven |
| Volatility | High | Moderate | High |
| Risk-Adjusted Returns | Higher Sharpe Ratio | Moderate Sharpe Ratio | Lower Sharpe Ratio |
| Economic Impact | Resilient to changes | Affected by policies | Influenced by macro factors |
4.Conclusions & Outlook
The 'Magnificent 7' stocks have demonstrated robust performance, driven by technological advancements and market leadership. However, their high volatility and sensitivity to economic events pose risks. The S&P 500 remains a stable benchmark, though its performance is influenced by broader economic policies. The IHSG's performance is closely tied to domestic economic conditions and global market trends.
Looking forward, the divergence in performance among the 'Magnificent 7' stocks is likely to continue, influenced by technological innovation and market dynamics. The S&P 500 and IHSG will remain sensitive to economic policies and global economic conditions. Further research could explore the long-term sustainability of the 'Magnificent 7's' growth and the impact of emerging market trends on the IHSG.
5.Methodology
This report synthesizes data from reputable financial sources and academic literature, including Visual Capitalist, Atlantis Press, and S&P Global. Key metrics such as annual returns, volatility, and Sharpe Ratio were compared across the 'Magnificent 7', S&P 500, and IHSG using 20-year historical data where available. Visualizations are based on illustrative data to reflect general trends and comparative insights.