I invested in Apple because the company offers a strong brand, continuous innovation and high customer loyalty. The growing services division ensures stable revenues, while the ecosystem of hardware, software and services is unique. Apple also demonstrates financial strength with high margins and solid buybacks. In the long term, I see great potential through AI, wearables and new technologies. An investment with a future! $AAPL (+0,26%)

The S&P 500 is overvalued according to traditional valuations, at least that is how it appears.

1. historical overvaluation and current key figures

Overvaluation based on historical data:

• 19 out of 20 valuation metrics indicate that the S&P 500 is more expensive than the long-term average.

Current valuation figures:

• The P/E ratio is currently around 30.5.
• The price-to-sales ratio is currently around 3.2.

These values show that the index is considered "expensive" by traditional standards.

2 Why is the S&P 500 so highly valued?

Dominance of mega-cap stocks

The S&P 500 is currently undergoing a transformation that is characterized by the increasing dominance of the Magnificent 7 ($GOOGL (-2,28%) | $AMZN (-2,39%) | $AAPL (+0,26%) | $META (-1,11%) | $MSFT (-1,57%) | $NVDA (-3,63%) | $TSLA (-4,32%) ). Companies such as Apple, Microsoft and Nvidia play a disproportionately large role in the index due to their market capitalization-based weighting. Although their strong growth, stable profits and their positions in key sectors such as AI, cloud computing and chip tech justify higher valuations, their share of the total market value of the index has increased significantly in recent years:

While they accounted for less than 10% of the index some time ago, their aggregated share is now around 30%. As a result, the expensive valuations of these mega caps distort the overall assessment of the S&P 500. The more moderate or even favorable valuations of smaller companies in the index are often masked as a result, which entails the risk that the apparent "inflation" of the overall market reflects Mag 7 rather than the broad market reality.

More robust company fundamentals

Many companies today are targeting recurring revenue streams such as software-as-a-service or subscription models, which allow for greater predictability of cash flows. This strategy not only reduces cyclical risks, such as less dependence on one-off sales or cyclical markets, but also creates a more reliable foundation for long-term growth. At the same time, companies have optimized their balance sheet structures through lower debt, high cash reserves and more efficient capital allocation, for example through targeted share buybacks or investments in profitable growth. These factors support higher valuations as investors are willing to pay a premium for stable earnings and lower default risks. Taken together, these developments mean that the seemingly high valuations of the S&P 500 may be justified not only by speculation but also by fundamental improvements in business models and financial discipline

Strategic change in companies

A key trend in corporate strategy today is the prioritization of efficiency & profitability over aggressive expansion. More and more companies are focusing on operational perfection and rather low-capital business models, comparable to cloud services or software. This focus not only reduces dependence on expensive infrastructure projects or physical assets, but also increases margins and resilience in volatile markets.

At the same time, there has been a profound structural change in the S&P 500, as the proportion of traditional industrial companies has fallen from 70% to around 50% since 1980. This development reflects the rise of digital, tech sectors, which are characterized by their scalability, global reach and often higher profit margins. Sectors such as software, cloud computing and AI are increasingly dominating the index, while capital-intensive industries are losing weight.

3 Risks and counterarguments

The risks and counterarguments to the current situation of the S&P 500 can be summarized in three main points. Firstly, there is a concentration risk as the index is heavily dependent on a small number of tech companies. If these companies are affected by regulatory measures or unexpected slumps in growth, this could weigh on the market as a whole. Secondly, the index is sensitive to interest rates. Rising interest rates could put pressure on high valuations even for companies with solid fundamentals, as higher interest rates reduce the attractiveness of growth stocks. Thirdly, the current valuation premium is based on the assumption that companies will achieve their optimistic earnings forecasts. If these expectations not If these expectations are not met, there could be a correction, as valuations could then be seen as excessive.

From my perspective, comparing today's S&P 500 to historical valuations is difficult as both the composition of the index and the business models have changed significantly. The dominance of tech and the shift towards more efficient, scalable business models make the index different today than in the past. I also see that the current high valuations of the S&P 500 are not necessarily excessive, but could be partly justified by structural changes. Market conditions have adjusted and higher multiples may reflect a "new normal" due to changing guidance on corporate earnings and market stability. Nevertheless, it remains important to keep an eye on the risks, as valuations are heavily dependent on the fulfillment of these optimistic expectations.

Have you heard about Apple's latest developments in the field of artificial intelligence? Apple $AAPL (+0,26%) has focused heavily on AI in recent years and is increasingly integrating this technology into its products.

With the new M-series chips, which have powerful neural engines, Apple can run AI applications directly on the devices. This means faster processes, better data protection and less dependence on cloud services. This will be particularly exciting for photo editing and the Siri voice assistant, which is being continuously improved.

Progress can be seen in features such as intelligent text recognition and automatic image enhancements. In addition, Siri could eventually respond to your requests in a much more personalized way thanks to generative AI and better algorithms.

What do you think about these developments? Will Apple $AAPL (+0,26%) overtake the competition with AI?

The AI start-up DeepSeek is causing a stir! With its latest technology, the DeepSeek-R1, it is challenging the billions in US investment. Its efficiency and low development costs could make the big players sweat. 🤔

The markets have reacted: AI shares came under pressure, and NVIDIA ($NVDA (-3,63%)) was hit particularly hard. The stock market value fell by almost 600 billion US dollars within one day - a loss of around 17%. Ouch! NVIDIA even lost the title of most valuable company to Apple ($AAPL (+0,26%)).

Wondering how this price war could evolve? Could DeepSeek ultimately change the market landscape for AI? Let's discuss it! 💬

Apple recently unveiled the iPhone 16e at a price of 699 euros - 250 euros cheaper than the iPhone 16. 🚀 What's special? It comes with its own 5G modem, which not only saves energy but also extends battery life by up to twelve hours. A real plus for anyone who travels a lot!

The Apple share $AAPL (+0,26%) is stable, despite a small fall of 0.07 percent in NASDAQ trading to 244.30 US dollars. What do you think of Apple's pricing strategy? Is it wise to invest in a cheaper model, or do you think the premium prices are justified? 💭

The 16e will also be equipped with AI functions from "Apple Intelligence", which will soon be introduced in Germany. What do you think of the future of Apple and its innovative strength? 📈

In the last few months I have learned a lot - especially through the exchange here in the community. My portfolio has changed changed a lotLess individual shares, more ETFs, and a clear strategy for the coming years.

🔹 In the past my portfolio was heavily dividend stocks characterized, above all $AAPL (+0,26%) and Swiss stocks with high dividends.

🔹 Today I am consciously focus on more diversificationbut with a focus on Swiss equitiesin which I have been 10 years invested and will continue to do so in the long term. The whole thing is supplemented by accumulating ETFsto minimize costs.

🔹 My current focus:

✅ Swiss blue chips:
$SLHN (+0,02%) , $ZURN (+0,21%) , $SREN (-0,09%) , $HOLN (-0,41%)

✅ Tech:
$AAPL (+0,26%) & $TSLA (-4,32%) as strong individual values

✅ ETFs: iShares MSCI World, S&P 500 for global diversification

✅ Commodities & crypto: Gold (iShares Gold ETF) and a small Bitcoin holding

2nd and 3a pillar (95% invested in equities) as a long-term hedge (these gains are not 100% in the portfolio)

My goal is to live 50 to live largely from the dividendsmy expenses are deliberately very low should remain very low. Until then, I will not be switching my strategy to distributing ETFs, but will continue to rely on accumulating ETFsto take full advantage of the compound interest effect and optimize the tax burden.

💡 Thanks to the community, I was able to develop my strategy further - thank you for your inspiration, tips & helpful contributions! 🙌

➡️ How do you handle the issue of accumulating vs. distributing ETFs? When do you think is the best time to switch? 🤔

Podcast episode 78: "Buy High. Sell Low."

Subscribe to the podcast to help Münzi rise to 400$.

00:00:00 Market overview

00:12:40 Palo Alto Networks $PANW (-3,05%)
$CRWD (-6,19%)

00:29:00 Nebius Group $NBIS (-13,18%)$TEM

00:52:00 Coinbase & Bitcoin $COIN (-7,3%)
$BTC (-1,2%)

01:17:00 Election programs: The Left, BSW, Volt

Spotify $SPOT (-3,66%)

https://open.spotify.com/episode/5u7nL29RbT9cZrVDZ9ATv0?si=0gSaCyjvTBKwHvkcFkVFlw

YouTube $GOOGL (-2,28%)
$GOOG (-2,32%)

https://youtu.be/Y0dcaNwLfW8

Apple Podcast $AAPL (+0,26%)

https://podcasts.apple.com/us/podcast/folge-78-coinbase-palo-alto-nebius-wahlprogramme/id1695869891?i=1000693370783

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