The flaw of traditional market-cap indexing

Claymore Investments, Inc. 14 May, 2010 | 3:16AM

Despite all their benefits, traditional market-cap-weighted indexes can be flawed in a very fundamental way. Because market cap, or price, is linked directly with the weight of the stock in the index, as a stock's price increases, so does the weight of the stock in the index. Investors using these indexes are forced to allocate more of their portfolio in overvalued stocks and less in undervalue

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Claymore Investments, Inc.

Claymore Investments, Inc.  

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