This chart speaks for itself, but the punchline bears repeating.
Most indexes are no good. Capitalization-weighted indexing makes investors too dependent (overweight) on recent winners and don't even get me started on the price-weighted Dow.
Check out how much the equal-weight S&P index fund (RSP) has outperformed the traditional cap-weighted approach (SPY) since the bull market began:
|Click me - I get larger|
Joe Investor would be best served by holding a diversified portfolio of equal-weight index ETFs, but guess what? They're pretty hard to find - go figure.
Please comment below if you're shocked that the financial industry does not offer a practical solution that requires the disassembly of an embedded gravy train, but I don't expect anyone to answer.