Tomorrow marks the unofficial beginning of the holiday shopping season. Black Friday – the day after Thanksgiving – has become the penultimate act of consumer frenzy.

I’m not sure when this tradition started. But it grows stronger every year and has spilled over into the days that precede and follow it.

I’m not much of a shopper, so I’ll spend tomorrow visiting family to avoid the chaos. But for the folks that don’t mind the crowds it is one of the best days of the year.

Window Dressing

A similar thing happens in the stock market about this time of the year. However, it has the opposite effect of motivating investors to buy what is cheap.

Instead, many professional portfolio managers feel compelled to buy what is most expensive. They believe they must show their shareholders that their portfolios include the hottest stocks.

This phenomenon is commonly referred to as “window dressing.” That’s because adding these popular stocks now at elevated prices does little more than improve the appearance of the portfolio.

It used to be that window dressing did not occur until the last two weeks of December. But just as the holiday shopping season has crept forward on the calendar, so too has the desire by portfolio managers to buy many of these stocks before everyone else does.

The entirely predictable result is that the rich get richer and the poor get poorer. Companies that have performed particularly well benefit from the added demand for their stocks. Those that have performed poorly suffer as their stocks are thrown overboard at fire sale prices.

Tech Sector Defanged

A likely beneficiary of this year’s window dressing will be NVIDIA (NSDQ: NVDA), which continued to skyrocket in value. NVDA opened this year at $136. At the start of this month, it traded above $208 before pulling back below $180 by then end of last week.

Also topping most portfolio managers’ shopping lists should be Alphabet (NSDQ: GOOGL), which gained nearly 60 percent through the start of this week. The same holds true for Netflix (NSDQ: NFLX) due to its 30% rise this year.

A year ago, I said: “This list is starting to look a lot like the FAANG stocks that dominated the stock market last year. In fact, it is the same group of stocks plus NVIDIA, Microsoft, and Tesla.”

That is no longer the case. So far this year, Apple (NSDQ: AAPL), Meta Platforms (NSDQ: META), and Amazon.com (NSDQ: AMZN) have appreciated less than the S&P 500 Index. FAANG isn’t dead, but it is starting to lose its bite.

That means the playing field is shifting, and it appears to be moving towards companies that manufacture the devices that facilitate artificial intelligence. That’s why hard disk drive manufacturers Western Digital (NSDQ: WDC) and Seagate Technology Holdings (NSDQ: STX) have more than doubled in price this year.

Changing of the Guard

This shift away from FAANG isn’t confined to the tech sector. This year, automakers General Motors (NYSE: GM) and Ford (NYSE: F) have appreciated more than twice the return of the S&P 500 Index.

So have pharmaceutical giants AbbVie (NYSE: ABBV) and Gilead Sciences (NSDQ: GILD). The same can be said for medical products manufacturer Johnson & Johnson (NYSE: JNJ).

I believe that development is good news for the stock market. It is gradually becoming less dependent on a small number of stocks in a single industry for growth, which makes it less vulnerable to a “black swan” type of disruptive event.

Where it goes from here, I do not know but I predict next year’s list will look quite different from this year’s group of window dressing winners.