FYI: Bigger is better in the stock market—for now.
Shares of Apple Inc., Microsoft Corp. , Facebook Inc. and other large market-cap stocks have risen significantly this year, as investors show clear signs of continuing to favor the stock market’s biggest cohorts.
All three stocks are up at least 52% this year, contributing heavily to the S&P 500’s nearly 25% gain since the end of December. The broad stock-market index weights its constituents by market cap, giving the biggest companies in the index more influence than smaller ones. It is outpacing for a third consecutive year its equal-weighted counterpart that avoids playing favorites based on size.
The S&P 500 Equal Weighted Index is up 23% in 2019. It puts the same emphasis on clothing retailer Gap Inc., which is worth $6.2 billion, as Apple, which is valued at $1.2 trillion, a factor that helps investors avoid the pain caused by sharp swings in individual stocks, money managers have said.
But that also means investors in funds that track equal-weight indexes missed out on some of the rewards from large-cap tech and communications shares’ strong run in recent years.
Regards,
Ted
https://www.wsj.com/articles/big-stocks-give-s-p-500-an-edge-11574185528Last 12 Mo:
SPY 18.27%
RSP 14.95%
3 Years:
SPY 51.31%
RSP 39.32%
5 Years:
SPY 67.33%
RSP 53.90%
Source Bespoke:
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