image_pdfimage_print

Battle of the indexes: Equal Weighted vs. Market Cap Weighted

The S&P 500 is one of the most quoted indexes in the world. It tracks the largest companies in the U.S. and has become one of the most popular indexes for not only stock market returns but also for comparing performance against (often referred to as a benchmark). It’s become so popular that people have made it a staple in a portfolios by buying an S&P 500 ETF or mutual fund. While plenty of people follow the index, few people actually understand how it’s constructed. The S&P 500 is a market capitalization weighted index. Here’s a quick definition: A type of market index whose individual components are weighted according to their market capitalization, so that larger components carry a larger percentage weighting.  So what does this really mean? It means that as companies grow larger and larger (think Apple or Exxon) they comprise more and more of the S&P 500
Continue Reading

Categories: Markets and Strategy.

A Recap of 2014 and a Preview to 2015

Boom! That’s how 2014 ended. The U.S. market continued its bullish streak (six plus years and counting) as the U.S. economy showed some really good signs of strength. Before we break down our stance on the global markets we need to recap the global returns from 2014. As you can see in the table below, the U.S. market completely destroyed the rest of the globe in terms of market performance. The struggles of Europe worsened the last half of the year while Russia and Brazil’s own issues slowed down the Emerging Markets. The global markets as a whole as represented by the MSCI All World Country index (which many use as the global benchmark) lagged the U.S. again this year. For the past two years the U.S. market has outpaced the rest of the global markets. Our economy, despite what you may see and hear in the press, is growing
Continue Reading

Categories: Markets and Strategy.
image_pdfimage_print