4 ms·
Stock indices no longer reflect equity reality
- andsoitis 2mo ago> Take the s&p 500. The biggest constituent, Nvidia, accounts for 8% of its value. Imagine the $5.3trn chip-designer’s share price moves up or down by 3% (as has happened 30 times this year) and the other 499 stocks are flat. That scenario (NVIDIA moves by 3% and no other stock moves) never happens. The market is dynamic, so all the stocks move at different magnitudes, volatility, frequency, etc. that is represented in the index.
- bediger4000 2mo agoBut isn't that an economics thing, "all other things staying equal"?