One reason this happens is because investors go with past winners. For example, Dell Computer which is the best performing stock of the 1990's. Almost every year it seems to set new records and make people rich. Dell Computer's business has been awesome this year. Every one of them is a pretty large company.
People perceive it as safe, and they pump a ton of money into it.
Every time that happens, the mutual funds actually have to go out and buy more shares of the stocks. Microsoft, Intel, Dell, America Online, Yahoo. They all go up when money is flowing into these funds. It's a classic economic inflation. Too many dollars chasing around too few stocks.