By Joseph Soltra, PMRA
Large company stocks have dramatically underperformed small and mid size company stocks since the recent February 8th short-term market bottom, making it appear to the average investor that the stock market has not yet surpassed its January 2010 rally highs. Upon closer examination, by comparing a chart of the S&P 500 Equal Weight Index to the market capitalization weighted S&P 500 Index (see chart below), it can be easily seen that the vast majority of stocks in the market have already surpassed their January 2010 highs. The S&P 500 Equal Weight Index (which places all 500 component stocks that make up the S&P 500 Index on an equally weighted basis) removes the distortions that can be created by the market capitalization weighting of the S&P 500 Index.
S&P 500 Equal Weight Index at Highest Point Since 2009 Market Bottom
Tags: market timing, stock market timing