As the second quarter earnings season kicks off, Wall Street Alliance Group Partner Aadil Zaman joins Wealth! to discuss how the Magnificent Seven — the grouping of premier tech stocks Amazon (AMZN), Apple (AAPL), Alphabet (GOOG, GOOGL), Nvidia (NVDA), Meta Platforms (META), Microsoft (MSFT), and Tesla (TSLA) — will perform amid sky-high earnings expectations and tech-driven market rallies (^DJI, ^IXIC, ^GSPC).
"We feel that these companies should be a core position in the portfolio. No doubt about that, right? And potentially, the earnings will be good as well. But it’s all about expectations. So again, in the short term for the retail investor, very difficult to predict," Zaman says.
He explains that the concentration of more than 20% of the S&P 500 (^GSPC) lies in three stocks, which investors want to hold on to. However, he advises that "no individual stocks should be more than 5% of the portfolio, and invest in other areas of the market to protect yourselves."
Focusing on Tesla (TSLA), Zaman notes that despite the stock’s volatility, "in the long term it’s going to do well." In order to navigate this dynamic, he encourages investors to limit their exposure "and be exposed to it in a very diversified way."
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