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as far as indexes , the higher a stock goes the more weight it carrys in a market weighted index influencing the index.
I think most in this thread probably understand that, Math. I think what they're objecting to is you implying (whether you meant to or not) that Vanguard index funds CONSCIOUSLY chase after hot stocks, as if they have a say in the holdings/weightings, rather than it simply being a result of mechanics.
exactley ,it is a result of the mechanics. anytime you have a weighted index the stocks with the most market capitalization influence it more.
sometimes that means the companies shares are bid far beyond what they are really worth and the index is influenced by stocks that went up more than they should have, apple comes to mind.
at one time apple and google made up 29% of the nasdaq qqq index. whether they were over valued is another story but like it or not where went google and apple went the index. .
A seemingly benign comment and observation spawned an entirely different (and dare I say, tired) debate. Geez.
FWIW, Chuck Royce is a veteran of the Graham-Columbia value school, and not some random outlier. I take everything with a grain of salt, but he actually deserves credit for his work.
i did a google search and only found that one etf (rsp) as being linked to an equally weighted index. are there any others?
there are a few . the bulk of index funds are not equally weighted and thats why my comments about the indexes being dominated by what has the largest market capitalization or those heavy favorites that grew and grew beyond where they should be...
rsp, ryp and qqew are the equally weighted ones i know of. i am not saying they are any better but they do things differently.
Last edited by mathjak107; 04-30-2013 at 03:25 PM..
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