Charlie Bilello Says 'Diversification Matters Again' as Magnificent 7 Hit Cheapest Valuation in Over a De

Markets have flipped as the Magnificent 7 tech megacaps hit their cheapest valuation relative to the rest of the S&P 500 in over a decade, prompting market strategist Charlie Bilello to declare that "Diversification matters again".

A Dramatic Factor Reversal For over a decade, crowded U.S. large-cap growth stocks dominated Wall Street, but a stark asset rotation has gripped the market.

According to data shared by Bilello, chief market strategist at Creative Planning, the Roundhill Magnificent Seven ETF (BATS:MAGS) actually dropped 2.5% in the first half of 2026.

Meanwhile, emerging market equities surged 24.2%, and U.S. small-caps rallied 22.6%.

This historic factor reversal underpins why Bilello concluded that "Diversification matters again," as investor capital actively rotates into previously lagging sectors.