The S&P 500 Isn't As Diversified as You Think. Here's Why.

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  • Опубліковано 27 чер 2024
  • How diverse actually is the S&P 500?

КОМЕНТАРІ • 25

  • @Lofranlof
    @Lofranlof 5 місяців тому +1

    Very interesting video, thanks!
    Also I would like to thank you for your videos on the time series analysis. Those helped me a lot in my applied math class this semester

  • @marissarodriguez2097
    @marissarodriguez2097 5 місяців тому

    I’ve recently started investing and had similar questions about diversifying my portfolio. This was so helpful, thanks!

  • @ep6305
    @ep6305 4 місяці тому

    Market cap weighting also makes index funds much more tax efficient as it removes capital gains for trying to constantly adjust holdings to be equal weighted

  • @ResilientFighter
    @ResilientFighter 5 місяців тому +1

    Educational and great videos as always.

    • @ritvikmath
      @ritvikmath  5 місяців тому

      Glad you enjoyed it!

  • @Jack-cm5ch
    @Jack-cm5ch 5 місяців тому

    I've been saying this for so long. And here it is materialized

  • @bin4ry_d3struct0r
    @bin4ry_d3struct0r 5 місяців тому

    Excellent points!

  • @user-jj3we9jv9i
    @user-jj3we9jv9i 5 місяців тому

    Bro, this video is unrelated to me, I am just here to comment and like your video so that the UA-cam algorithm increases your reach. Love your machine-learning math content bro!
    Great work

  • @saswattulo2091
    @saswattulo2091 5 місяців тому

    One of the best videio of the year. We need to question more?

  • @douglashurd4356
    @douglashurd4356 5 місяців тому

    Would you be interested in doing a video on the Sharpe Ratio Efficient Frontier?

    • @ritvikmath
      @ritvikmath  5 місяців тому

      hey I'll look into it, thanks for the suggestion!

  • @theusualyt
    @theusualyt 5 місяців тому

    u might enjoy mike green on passive investing, and some related tier 1 alpha presentations put together since I believe it's a hedgeye product/ partner there was one done on that channel that covers some related ideas

  • @toshiro6589
    @toshiro6589 5 місяців тому

    I have made a vector autoregresion model for sp 500 using yfinance in python so for every stock i know which stocks have power to predict returns of other stocks an when will that happen. Any investors? 😊

  • @mgevirtz
    @mgevirtz 5 місяців тому

    For those of you unfamilair with the economics jargon, "weight" means market capitalization or more simply dollar worth of each company. Apple Inc. is thought to be worth more dollaz than Disney.

  • @theprofessionalfence-sitter
    @theprofessionalfence-sitter 5 місяців тому

    Of course, there are also the obvious problems that 1. it contains only American companies and 2. it contains only large cap companies. That already makes it inherently less diverse than something like the FTSE Global All Cap Index.

    • @ritvikmath
      @ritvikmath  5 місяців тому

      yes those are good points; there's probably more to say about diversifying beyond large US stocks

  • @mgevirtz
    @mgevirtz 5 місяців тому

    Why would a large or the LARGEST have a high potential for growth? It's usually the smaller things that have the largest upside.

    • @ritvikmath
      @ritvikmath  5 місяців тому +2

      Certainly not causal and arguably not relevant to the unequal weighting logic I raised. The main logic behind the unequal weighting of the index is that the companies with the highest market capitalizations affect the economy the most, all else held constant.

  • @SNTZ88
    @SNTZ88 5 місяців тому

    There are equal weighted SP500 ETFs, for example RSP

    • @ritvikmath
      @ritvikmath  5 місяців тому

      Thanks for bringing that up! Was very interested to have learned about those while researching for this video. Curious how those perform over the long term vs usual s&p