You completely nailed it. The S&P500 is far more risky than the average person realizes it to be. 6 stocks represent approximately 25% of the S&P500's value (cap weighted) . . . one of which is Telsa with a P/E ratio that swings between 300 - 1200+. And yet S&P500 cap weighted funds make up a cornerstone of nearly every pension scheme in the world. But it is a psychological feat to not invest some of one's assets into such funds, as they have truly triumphed. Not certain what the answer is, but we do know that the temptation to manipulate public markets has proven to tempting for central banks to avoid.
Correct. They really should rename it the S&P 6.