Unleashing the Power of Accelerating Money Supply: Strategies for Savvy Investors

In the current bull market, the rise of big tech stocks has been the defining characteristic, with the world's largest companies leading the charge in artificial intelligence (AI) innovation. However, as market concentration reaches levels not seen since the 1970s, a shift may be on the horizon, as the money supply growth is finally accelerating, signaling a potential broadening of the market.

Unlock the Opportunities in a Shifting Market Landscape

Embracing the Fundamental Approach: Schwab Fundamental U.S. Large Company ETF

The Schwab Fundamental U.S. Large Company ETF (FNDX) offers a unique approach to investing in large-cap stocks. Unlike traditional market-cap-weighted indexes, this fund follows an index that ranks and weights securities based on fundamental factors, such as adjusted sales, operating cash flow, and cash returned to shareholders. This strategy results in a much less concentrated portfolio compared to the S&P 500, making it an attractive option for investors seeking to capitalize on the market's potential broadening.The fund's contrarian investment approach, which rebalances holdings to favor stocks with declining prices relative to their fundamentals, effectively tilts the portfolio towards large-cap value stocks. This positioning could prove advantageous as money supply growth accelerates, potentially driving a resurgence in value stocks. With an expense ratio of 0.25%, the Schwab Fundamental U.S. Large Company ETF provides a cost-effective way to diversify beyond the market's largest players and potentially outperform the top-heavy S&P 500.

Diversifying with Equal-Weight Exposure: Invesco S&P 500 Equal Weight ETF

The Invesco S&P 500 Equal Weight ETF (RSP) offers a unique twist on traditional S&P 500 index investing. Instead of weighting each component by market capitalization, this fund invests an equal amount in each stock, ensuring that the returns generated by the smallest companies are just as impactful as those of the largest players, such as Apple, Microsoft, and Nvidia.The equal-weight approach has historically outperformed the cap-weighted S&P 500 over the long run, with the Invesco fund delivering an average compound annual return of 11.63% since its inception in 2003, compared to 11.06% for the S&P 500. While the fund has underperformed in recent years, its diversification strategy could prove advantageous as the market broadens and smaller companies outperform their larger counterparts.With a low expense ratio of 0.20%, the Invesco S&P 500 Equal Weight ETF offers an affordable way for investors to gain exposure to the entire large-cap universe, positioning themselves to benefit from the potential acceleration in money supply growth.

Tapping into the Small-Cap Opportunity: SPDR Portfolio S&P 600 Small Cap ETF

The SPDR Portfolio S&P 600 Small Cap ETF (SPSM) provides access to the S&P 600 index, which focuses on small-cap stocks. Unlike other small-cap indexes, the S&P 600 has a profitability requirement, resulting in a portfolio that leans towards value stocks. This is a significant advantage, as small-cap value stocks have historically outperformed every segment of the market over the long term.As the money supply growth accelerates, small-cap stocks could be poised for another period of outperformance. Moreover, the S&P 600's valuation is currently extremely attractive, with a forward price-to-earnings ratio of just 14.5, compared to the S&P 500's aggregate forward P/E of 20.2. This valuation gap presents a compelling opportunity for investors seeking to capitalize on the potential market broadening.The Invesco S&P 600 index fund offers an extremely low expense ratio of just 0.03%, making it one of the most cost-effective ways to gain exposure to the small-cap segment of the market. As the money supply growth accelerates, this fund could be an excellent choice for investors looking to access an undervalued and potentially outperforming area of the market.