No such thing as a market?

But the market is a construct. While of course you can trade the S&P 500, its performance is the collective consequence of some 500 individual developments. This month, the S&P 500 was flat. I do suspect many a comment would stop at just that – a flat market. Maybe adding that the Nasdaq Composite rose by 1.9%.

This may look surprisingly strong in a month when the yield on 10-year Treasuries reached 5.27%, up a full 53 basis points from August. Credit spreads rose by a similar amount, at least outside the Nordics, so I can surely describe market sentiment as risk-off. European stock markets certainly seemed to take notice, which makes the US strength all the more impressive.

Ahem … I checked the individual performance of the index constituents. Only 104 companies in the S&P 500 had a positive performance in September. The rest, four out of five, fell in value – dividends included. And as for the positive Nasdaq performance, only 30% of the constituent companies posted a positive return. The rest fell, belying the strength of the index. One should be wary of talking about a strong market when most of the stocks actually fall in value.

For the Norwegian OSEBX benchmark, only one in three companies delivered a positive return in September. Perhaps not that surprising, given a decline in the index of 2.0%. But look at March, the best month by far this year, with an index return of 9.3%. During that very month, fewer than half of the constituents posted black figures. Less than a quarter managed to match the index.

This is both a consequence of a more concentrated market and the corollary of variation in companies’ market risk (beta). However, I may add that for the OSEBX this year, there is a correlation of -0.65 between monthly index returns and the share of companies lagging the index. A statistician would warn against reading too much into this figure, but I still find it telling.

Margaret Thatcher famously (some claim infamously) said that there is no such thing as society. There is of course such a thing as a market, as there are both a marketplace and a tradeable representation of aggregate performance. We just need to remember that this “market” isn’t necessarily very representative of the companies it is supposed to represent. With highly concentrated markets, like we see in 2026, it may be strikingly unrepresentative.

Hence, while my monthly missives often focus on exactly these averages or other wider yardsticks, my advice is that you then forget about them and take a look at your own portfolio instead. A little bit wiser, I hope, but not too distracted.

Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on, market developments, the portfolio manager’s skill, the fund’s risk profile, as well as fees for subscription, management and redemption. Returns may become negative as a result of negative price developments. This is marketing communication.