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SP500 Index Fund or Managing Your Own Equal Weighted Portfolio?

Started by chris_dukeOfDollars, November 24, 2018, 06:41:50 AM

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chris_dukeOfDollars

Hi all -

I recently re-read Joshua Kennon's Article on the SP500 Changes that could change your investment returns: https://www.joshuakennon.com/sp-500s-dirty-little-secret/

It has me thinking to try out his recommendation on an equal weighted portfolio in the future as a part of my portfolio (in addition to REITs, individual stocks, and index funds).

What do you all think?

david123

Hmm.... Interesting.  Not sure how much difference it will be in the returns.  I'm a "boring" investor that generally just sticks with index funds, and the SP500 is a pretty good one historically.

Fat Tony

There's RSP: Invesco S&P 500 Equal Weight ETF. The expense ratio is only 0.25%. If you think there's a free lunch/market inefficiency and you can get some gains here smart-beta style, go for it. Managing 500 individual S&P stock component is a major pain and the only advantage is if you have some hardcore tax-loss harvesting strategy where you look for losses on each and every individual stock (and then have to double up on highly correlated stocks for 30 days). Wealthfront does this in their direct indexing strategy but it's probably not recommended if you're doing it manually. For most people, having 4-10 ETFs gives sufficient tax loss harvesting chances.