Category: Index Fund

  • A Better Way to Index?

    In the last post, we saw how market cap weighting systematically over-weights “expensive” stocks and underweights “cheap” stocks. Non-market cap weighting is a potential solution. Non-Market Capitalization Weighting Let’s look at a few studies regarding the effects of different indexing methods. The availability of historical returns databases, and modern computing…

  • Are Capitalization-Weighted Indexes (Like the S&P 500) Inferior?

    Most financial advisors agree that it’s difficult to beat “the market”. It’s easy to define “beat the market” as generating an investment return (typically before tax, and typically ignoring transactions costs) that is greater than the market return. But what, exactly, is “the market”? Which Stocks in the Index? In…

  • Buffett Just Sold His Index Fund Position—Index Investing: Yes or No?

    If someone came to you today and asked, “What’s the case for index investing?” what would you say to that person? In light of Warren Buffett’s recent sale of his Vanguard Index Fund position, advisors and clients may be more interested than usual in the case for index investing. There’s…

  • The Rise of Index Investing—And Why You Should Care

    The indexing approach to investing accounts for over half of US equity investments in 2025. Compare that to the 1970s, when it was almost non-existent. Among many investors and their advisors, indexing has become conventional wisdom. There are good reasons for indexing’s growth. The case for indexing is strong, and we will…