Capitalization-Weighted Indexes

Aug 2005 //
Benchmarks

Given that some academics have promoted indexing with near-religious zeal, it is to Wharton professor [Jeremy] Siegel’s credit that he hasn’t let conventional wisdom and beliefs get in the way of reality—and the reality is that capitalization-weighted indexes, such as the S&P 500, consistently overweight overpriced stocks and underweight bargain investments.