Capitalization Weighted Indices Revisited

Jul 2017 //
Bubbles
Risk vs. Volitility

…sometimes the performance of the S&P 500—heavily influenced by its weighting of a relatively small number of very large-capitalization stocks—can significantly diverge from the performance of most stocks.  Indeed, this happened with a vengeance back in the late 1990s, an era of significant bubbles in some stock prices.