tag:blogger.com,1999:blog-14963913.post9019932260539121927..comments2023-10-27T20:27:57.900-04:00Comments on Kid Dynamite's World: Equal Weight Index Funds and the Sin of Portfolio ManagementKid Dynamitehttp://www.blogger.com/profile/17475987512856310577noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-14963913.post-4953351957988492472018-07-27T07:40:12.819-04:002018-07-27T07:40:12.819-04:00Nice article. I found some interesting information...Nice article. I found some interesting information here. Please keep sharing and you can visit to my blog <a href="http://www.forexinworld.com/" rel="nofollow">FOREXINWORLD</a> for free trade signals, trade news, and high tension calendar event alerts with description.forex in worldhttps://www.blogger.com/profile/03451739405295170945noreply@blogger.comtag:blogger.com,1999:blog-14963913.post-88613625103738899562011-02-10T10:22:44.594-05:002011-02-10T10:22:44.594-05:00Both "indexes" and "indices" a...Both "indexes" and "indices" are real words, with different meanings. "Indexes" is appropriate in certain usages of the word -- for example, "That is the only ETF out there that <i>indexes</i> its portfolio in this way." Obviously you're not going to say "indices" in that sentence, so obviously the word "indexes" is part of the language today.<br /><br />But as the plural of the noun "index", the right word should be "indices".Hammer Player a.k.a Hoyazohttps://www.blogger.com/profile/17031535857121915911noreply@blogger.comtag:blogger.com,1999:blog-14963913.post-5063294596722751392011-02-10T10:09:43.218-05:002011-02-10T10:09:43.218-05:00i would guess that 95% percent of people would be ...i would guess that 95% percent of people would be more comfortable/ familiar with indexes. however, the 5% of people who would prefer indices are the only 5% who will actually care about the distinction. both are acceptable - one is more traditionally correct. <br />Be proud - use language properly - if only to avoid the ire of grumpy grammar ninja's. <br />Disclosure - long on the 5% (reluctantly)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-14963913.post-31209923429658319112011-02-09T19:33:10.541-05:002011-02-09T19:33:10.541-05:00Re: "indices" vs. "indexes"
&...Re: "indices" vs. "indexes"<br /><br />"indices" is the original Latin plural. "indexes" is a modern (17th century) invention by the ignorant. Both are considered correct these days.<br /><br />In other words, use "indices".Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-14963913.post-72373893003589179612011-02-09T17:52:44.532-05:002011-02-09T17:52:44.532-05:00Mea Culpa - I had previously calculated these numb...Mea Culpa - I had previously calculated these numbers as of April 2010. When posting this comment I extended the calculation of the still favored holding of RSP through yesterday, but did not recalculate the total switching strategy performance to current. Those numbers are through April 2010.<br /><br />I don't think it invalidates the point obviously.<br /><br />JBJefferson@Morindanoreply@blogger.comtag:blogger.com,1999:blog-14963913.post-34576366860080985192011-02-09T17:46:30.109-05:002011-02-09T17:46:30.109-05:00I think this begs the next question; how does an i...I think this begs the next question; how does an investor take advantage of these two different methodologies?<br /><br />A "relatively" simple switching strategy between a cap-weighted index and it's equal-weighted counterpart can provide a sometimes dramatic difference in returns vs buying and holding either index. As one would imagine, the 90's tended to favor the cap-weighted approach, remember the 4 horsemen? The 2000's in contrast saw much broader participation in equity mkts, and performance of the equal-weight method show it.<br /><br />From 1/1/90 thru 12/31/99 the SPX (not incld dividends) was up 315.75% while the SPX Eq Wt was up 224.24%. 1/1/00 thru 12/31/09, the numbers are -24.10% SPX vs +39.52% SPX Eq Wt.<br /><br />A relative strength switching strategy, using a 3.25% scale on a point & figure chart comparing SPY to RSP, and holding the favored index ETF results in even larger return differences. From 1/5/94 to 5/10/00 SPY favored and returned <br />195.45% vs RSP ret 122.87% From 5/10/00 to 10/23/08 RSP favored and ret -.79% vs -33.62% for SPY. 10/23/08 to 4/16/09 SPY favored and returned 5.66% vs 1.50% RSP. 04/16/09 to 2/8/11 RSP return 76.11% vs 52.26% for SPY. (Excludes dividends) So...for the entire period calculated, buy & hold SPY +125%: buy & hold RSP +254%: switching into favored ETF when RS chart reversed, +337%.<br /><br />Blog comments full of numbers are boring, I know. But an interesting, and flexible take on incorporating the various weighting methodologies in real asset allocation.Jefferson@Morindanoreply@blogger.comtag:blogger.com,1999:blog-14963913.post-86280235912468713842011-02-09T17:13:22.515-05:002011-02-09T17:13:22.515-05:00@verloregeneration: I started to write in the pos...@verloregeneration: I started to write in the post about how the bulk of your returns will come from catching a big bull market - momentum, not mean reversion - but I deleted it because I didn't want to confused issues. In bouncing markets (mean reversion, I mean - up and then down) - you want the frequent rebals. In trending (up) markets, you want to let your winners run... I have written previously about fat positive tails, which is what we're really trying to capture:<br /><br />http://fridayinvegas.blogspot.com/2009/12/kds-year-in-review-part-1-isaac-newton.htmlKid Dynamitehttps://www.blogger.com/profile/17475987512856310577noreply@blogger.comtag:blogger.com,1999:blog-14963913.post-18136265795025902652011-02-09T17:06:59.252-05:002011-02-09T17:06:59.252-05:00I don't think the rebalancing frequency will c...I don't think the rebalancing frequency will change the picture - it only affects the transaction costs. Given the "size effect" equally weighted fonds will perform, on average, better. This paper implies that this is due to higher risk:<br /><br />http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1537002Anonymousnoreply@blogger.com