Korslänkning från en annan tråd där det finns en ETF som har försökt sig på att lösa problemet ovan med att på fundamental basis försöka exkludera övervärderade bolag.
It is normal for the stock market to be dominated by a few large companies, that’s just the way it is. And usually the companies that are at the top have a good deal of faddishness, bubbliness, and irrationality to them, and that’s just the way it is, too. And the odd thing is that the “fundamental indexing” products that specifically seek to avoid participation in the craziness have been out for well over a decade, and haven’t proved to perform all that differently from cap-weighted products.
Let’s not argue about which is better , the S&P 500 fund (orange) or the Schwab Fundamental US Large Company Index Fund (blue), let’s just observe that top-heavy or not, the S&P 500 fund just didn’t stink all that badly.
In fact, despite trying to avoid the fundamentally unsound companies, the fundamental-weighted fund actually took deeper dives in 2008-2009 and this year. And the same thing held true for RSP (green).
You’d think trying to stay out of the craziest stocks would moderate volatility, it sounds like it would do that, but it hasn’t done that.
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