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What makes you think that SP500 index funds, which are cap-weighted, amount to buying high and selling low?
by david-gpu 6y ago
What makes you think that SP500 index funds, which are cap-weighted, amount to buying high and selling low?
- cracker_jacks 6y agoCompanies leave the index when they fall below a certain market cap. Companies enter the index when they are above a certain market cap. That is literally the definition of buying high and selling low.
- david-gpu 6y agoThe turnover rate is low and the weight of those companies in the index is very small. That said, I prefer broader indices.