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> The point of the article is that tech, specifically the big names we all know, account for the vast majority of the indexes gain this year. They are asking if

> The point of the article is that tech, specifically the big names we all know, account for the vast majority of the indexes gain this year. They are asking if you should go against the index weighting and do your own weighting so you aren't so heavy on tech, but again, that goes against the ethos of passive investing. I don’t think this is quite right. The article is observing that weighted indexing goes against the ethos of pure passive investing, since it overweights the bigger companies and exposes you too more risk in the event that one of the highly-weighted stocks takes a big hit. This is a choice that folks might not be intentionally making. If you become aware of this exposure and decide to opt for a an equal-weight index, you aren’t engaging in “active investing”. Quite the opposite.

anuraaga 3y ago
Exactly this. There was a time I tried diversifying from mostly FDN (tech only) to include VTI (S&P) to still trend growth. And eventually realizing these indexes are mostly the same, switched the lower-growth side to include VT. But I find even that, while not as much, is still dominated by the same companies. I would say these two are the vanguard of passive investing (pun intended) but are not working as they used to at diversifying. It might not matter though given these big companies seem too big to fail at this point and some growth is still desired, cash doesn't seem far worse than equal weight indexes at least for now. I suspect everyone is saying the same thing, S&P isn't broken, it's not as diverse as it may have been, but that doesn't mean it's something to avoid when doing passive investing, knowing it's not quite diverse would be a plus though.