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Archive for April, 2013

Equal weight v. Market weight

Tuesday, April 30th, 2013

As in most choices, there are plusses and minuses to an index creation.テつ Apple represents about 3% of the S&P 500 as a market-cap weighted index.テつ If, however, the S&P 500 Index was an equally-weighted index it would only represent 0.2%.テつ Big difference.テつ Apple would no longer “drive” the index, reducing one’s exposure to large cap stocks.

The equally-weighted index would, however, be subject to the volatility of smaller cap stocks.テつ Either approach – in different times – would outperform the other, of course.テつテつテつ From a practicalテつperspective, however, the fees related to the equally-weighted indices have been greater than market cap weighted indices.テつ Fund managers must constantly monitor and rebalance the fund to keep the equal weighting, which seems to tilt in favor of market-cap weighted indices.

401K: How much is too much?

Wednesday, April 24th, 2013

President Obama’s 2014 budget proposes a cap on what Americans can save – in their (more…)

Rally in Small Cap Stocks: Too Much of a Good Thing?

Saturday, April 20th, 2013

Small cap stocks have performed well in 2013, just as they have since the market bottom in March 2009.テつ In fact, they have (more…)

Apple v. Google: A Change in Fortunes

Thursday, April 11th, 2013

AAPL’s stock has not performed well lately.テつ GOOG’s, on the other hand, has.テつ Bottom line, it is tough (more…)

Complacency: The “Only” Thing to Fear

Thursday, April 11th, 2013

The stock market is at or near all-time highs….and the march upward (more…)