Are you invested in the S&P 493? Do you even know about this index?

It's not a traditional index that you can look up online or buy in your brokerage account… 

But this index is extremely relevant to protecting your wealth in our current market.

So I want to explain why this index deserves your immediate attention. And I'll show you how to get immediate exposure to it today.

A Change for the Magnificent Seven

You probably haven’t heard of the "S&P 493" index before, but you may have heard about the "magnificent seven" blue-chip stocks. 

This list includes the most beloved and heavily owned stocks in the S&P 500:

• Amazon (AMZN)

• Apple (AAPL)

• Alphabet (GOOG)

• Meta (META)

• Microsoft (MSFT)

• and NVidia (NVDA)

Added together, these stocks represent 28% of the total S&P 500. Gains from these seven stocks have been responsible for almost the entire gain for the index this year.

In other words, the rest of the market has hardly budged while the magnificent seven stocks have carried all the weight.

This isn’t all bad. Most investors have at least some exposure to these stocks since they’re so popular, which means people are growing their wealth as these stocks trade higher.

But on the other hand, this high concentration creates a huge risk. Because after a tremendous run, many of the magnificent seven stocks are expensive, overbought and vulnerable.

A big pullback for these stocks would hurt a large number of investors — even if the rest of the market held up just fine!

That "rest of the market" is what I want to talk to you about today...

Investing in the S&P 493 Index

As you may have guessed, the S&P 493 index is a term being thrown around for the rest of the S&P 500 apart from the magnificent seven.

This list of 493 stocks is still full of large-cap reputable companies including:

• Exxon Mobile (XOM)

• JPMorgan Chase (JPM)

• Cisco Systems (CSCO)

• UnitedHealth (UNH)

• Lockheed Martin (LMT)

• Walmart (WMT)

• and Caterpillar (CAT)

Now, let me ask you this... Do you notice a difference between the first and second list of stocks? 

One thing that should jump out at you is that the second list is diversified. It includes stocks in energy, finance, tech, healthcare, defense, retail, industrials and more.

That's how a real investment portfolio should be constructed: with exposure to different areas of the market. 

That way if technology stocks start to sell off, it's likely that your energy play or industrial stock will help to offset that pullback.

Diversification is one of the few free lunches you can get as an investor. 

It doesn't cost you anything to diversify. But the long-term benefits of spreading your investments into different areas can add up over time.

That's why I want to help you make an easy shift to harness the power of diversification and give you access to the 493 stocks that aren’t represented by the magnificent seven.

Consider an Equal Weight Index Fund

Many investors simply buy the SPDR Select S&P 500 ETF (SPY) in their brokerage account. Wealth managers often use this as a go-to position for most of their investment clients.

You can buy this fund in your brokerage account just like any stock. When you do, you'll immediately be invested in the S&P 500 index.

It's a fast and easy way to invest in the entire index. But the problem is, about 28% of your money will go directly to the magnificent seven stocks. 

So if this area of the market pulls back after its tremendous run, you'll still have a lot of risk (and not as much diversification as you might expect).

A better option would be to buy the Invesco S&P 500 Equal Weight ETF (RSP).

Just like SPY, you can buy shares of RSP in your brokerage account just like a stock.

But unlike SPY, when you buy shares of RSP, you're investing directly in all of the stocks included in the S&P 500. 

And the index is balanced periodically so that each of the 500 stocks has an equal weight in your portfolio.

This way, you have exposure to industrial stocks, financial stocks, healthcare stocks and so on — all in a single ETF.

If you look back over the recent returns for RSP, you might be disappointed. So far this year, an equal-weight version of the S&P 500 has underperformed the magnificent seven by quite a lot.

There have been plenty of periods in history when this equal-weight strategy underperforms the largest tech stocks during a bull market.

But typically after a strong surge for large-cap tech stocks, an equal weighted version of the S&P 500 tends to outperform. That's exactly what I'm betting on heading into the end of the year.

Of course here at Rich Retirement Letter, we continue to research individual stocks and specific sectors that have the best potential for gains this year. 

But even with these individual plays in mind, it can be helpful to have a core diversified position in the broad market.

For that position, I recommend using RSP. I think this will help you grow and protect your wealth much better over the next several months.