Why I don’t invest in the S&P 500?

Long_Equity
12-02

Why I don’t invest in the $.SPX(.SPX)$ :

- only 25% of the index has a FCF/share growth greater than 15%

- only 26% of the index has a return on capital greater than 12%

- only 12% of the index has both of the above

- I don’t want to own banks, airlines and energy companies

- I don’t want to own anything discretionary

- I don’t want to own alcohol, tobacco or gambling stocks

- I don’t want to own anything highly leveraged or highly cyclical

What would you add?

$SPDR S&P 500 ETF Trust(SPY)$ $E-mini S&P 500 - main 2412(ESmain)$

Personally, I've always been wary of the S&P 500's emphasis on mega-cap stocks. I think there are better growth opportunities in smaller companies, especially in emerging industries.

The equally weighted index typically performs quite well, as it gives more emphasis on smaller stocks.

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Comments

  • Twelve_E
    12-02
    Twelve_E

    So what kind of stocks would you like to own out of the consideration of four “don’t want“

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