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The index has become a bubble in of itself. It's also not as diversified as you would think when Microsoft makes up 5-6% of the S&P and over 10% of Nasdaq.
by tempsy 7y ago
The index has become a bubble in of itself. It's also not as diversified as you would think when Microsoft makes up 5-6% of the S&P and over 10% of Nasdaq.
- hrpnk 7y agoOther indexes, like the German DAX [1] have a hard cap at 10% per company. [1] https://de.wikipedia.org/wiki/DAX https://de.wikipedia.org/wiki/DAX
- dlp211 7y agoSo then purchase and overweight small and mid-caps and international indexes if you think that SPY is top heavy. You don't need to deviate from index investing just because a part of the index is outperforming the rest. Choose an allocation, stick to it, rebalance when you hit some threshold.
- tempsy 7y agoI don’t want to buy the index?
- Kluny 7y agoYou don't have to stick to the S&P index. There are others that follow tech, or commodities, or the Canadian stock market, green energy or what have you. You can diversify yourself.
- MuffinFlavored 7y ago500 of the top American companies is good enough for me. (S&P500)