The equal vs cap weighted Anomaly is getting more anomalous

The equal vs cap weighted Anomaly is getting more anomalous… 👀🤔

Normally in the long-run the equal-weighted version of the S&P500 $S&P 500(.SPX)$ outperforms the cap-weighted (for a number of good reasons) — the more recent dominance of cap-weight is an anomaly.

It's also an echo of the dot-com bubble era (many such echoes), and that could be an issue.

There is a chance this resolves via “Bullish Rotation“, but more likely the way it reverts (if/when it does!) would be through weakness in mega-caps.

Line chart displaying the ratio of S&P500 equal-weighted index to market cap-weighted index over time from 1980 to 2024.

The y-axis ranges from 1 to 4 representing the ratio value. The x-axis shows years from 80 to 24. A blue line traces the ratio trend starting low in the 1980s rising gradually with peaks around 2000 and recent divergence post-2020.

For SG users only, a tool to boost your purchasing power and trading ideas with a Cash Boost Account!

Welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with upcoming 0-commission, unlimited trading on SG, HK, and US stocks, as well as ETFs. Find out more here.

Other helpful links:

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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The x-axis shows years from 80 to 24. A blue line traces the ratio trend starting low in the 1980s rising gradually with peaks around 2000 and recent divergence post-2020.  </p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/d8c5742efb3bc1460ffe3994348fb049\" tg-width=\"680\" tg-height=\"536\"></p><h2 id=\"id_1695694732\" style=\"text-align: left;\"><span class=\"color-mark\" style=\"color: rgb(230, 126, 35);\">For SG users only, a tool to boost your purchasing power and trading ideas with a Cash Boost Account!</span></h2><p style=\"text-align: start;\">Welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with upcoming 0-commission, unlimited trading on SG, HK, and US stocks, as well as ETFs. Find out more here.</p><p style=\"text-align: start;\">Other helpful links:</p><ul style=\"\"><li><p><a href=\"https://ttm.financial/TW/367769452580952\" title=\"💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉\" class=\"\">💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉</a></p></li><li><p><a href=\"https://ttm.financial/TW/455186728267792\" title=\"🎉The Cash Boost “Daily Draws” is Now Live – Come Join the Fun!\" class=\"\">🎉The Cash Boost “Daily Draws” is Now Live – Come Join the Fun!</a></p></li><li><p><a href=\"https://www.itiger.com/sg/help/detail/06324754?_sasdk=fNDE0MTg2NzAwNTE0OTk2Mg\" title=\"How to open a CBA.\" class=\"\">How to open a CBA.</a> <a href=\"https://www.itiger.com/sg/help/detail/how-to-link-CDP?_sasdk=fNDE0MTg2NzAwNTE0OTk2Mg\" title=\"How to link your CDP account.\" class=\"\">How to link your CDP account.</a> <a href=\"https://www.itiger.com/sg/help/detail/contra-faq?_sasdk=fNDE0MTg2NzAwNTE0OTk2Mg\" title=\"Other FAQs on CBA.\" class=\"\">Other FAQs on CBA.</a> <a href=\"https://www.itiger.com/sg/invest/cash-boost\" title=\"Cash Boost Account Website.\" class=\"\">Cash Boost Account Website.</a></p><p><img src=\"https://community-static.tradeup.com/news/6f1aec1931614d75740fda726cd34ade\"></p><p></p></li></ul></body></html>","htmlText":"<html><head></head><body><p>The equal vs cap weighted Anomaly is getting more anomalous… 👀🤔</p><p>Normally in the long-run the equal-weighted version of the S&amp;P500  <a data-mention-id=\".SPX\" class=\"teditor-mention\" data-mention-name=\"S&amp;P 500\" href=\"https://ttm.financial/S/.SPX\">$S&amp;P 500(.SPX)$</a> outperforms the cap-weighted (for a number of good reasons) — the more recent dominance of cap-weight is an anomaly.</p><p>It's also an echo of the dot-com bubble era (many such echoes), and that could be an issue.</p><p>There is a chance this resolves via “Bullish Rotation“, but more likely the way it reverts (if/when it does!) would be through weakness in mega-caps.</p><p>Line chart displaying the ratio of S&amp;P500 equal-weighted index to market cap-weighted index over time from 1980 to 2024. </p><p>The y-axis ranges from 1 to 4 representing the ratio value. The x-axis shows years from 80 to 24. A blue line traces the ratio trend starting low in the 1980s rising gradually with peaks around 2000 and recent divergence post-2020.  </p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/d8c5742efb3bc1460ffe3994348fb049\" tg-width=\"680\" tg-height=\"536\"></p><h2 id=\"id_1695694732\" style=\"text-align: left;\"><span class=\"color-mark\" style=\"color: rgb(230, 126, 35);\">For SG users only, a tool to boost your purchasing power and trading ideas with a Cash Boost Account!</span></h2><p style=\"text-align: start;\">Welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with upcoming 0-commission, unlimited trading on SG, HK, and US stocks, as well as ETFs. Find out more here.</p><p style=\"text-align: start;\">Other helpful links:</p><ul style=\"\"><li><p><a href=\"https://ttm.financial/TW/367769452580952\" title=\"💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉\" class=\"\">💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉</a></p></li><li><p><a href=\"https://ttm.financial/TW/455186728267792\" title=\"🎉The Cash Boost “Daily Draws” is Now Live – Come Join the Fun!\" class=\"\">🎉The Cash Boost “Daily Draws” is Now Live – Come Join the Fun!</a></p></li><li><p><a href=\"https://www.itiger.com/sg/help/detail/06324754?_sasdk=fNDE0MTg2NzAwNTE0OTk2Mg\" title=\"How to open a CBA.\" class=\"\">How to open a CBA.</a> <a href=\"https://www.itiger.com/sg/help/detail/how-to-link-CDP?_sasdk=fNDE0MTg2NzAwNTE0OTk2Mg\" title=\"How to link your CDP account.\" class=\"\">How to link your CDP account.</a> <a href=\"https://www.itiger.com/sg/help/detail/contra-faq?_sasdk=fNDE0MTg2NzAwNTE0OTk2Mg\" title=\"Other FAQs on CBA.\" class=\"\">Other FAQs on CBA.</a> <a href=\"https://www.itiger.com/sg/invest/cash-boost\" title=\"Cash Boost Account Website.\" class=\"\">Cash Boost Account Website.</a></p><p><img src=\"https://community-static.tradeup.com/news/6f1aec1931614d75740fda726cd34ade\"></p><p></p></li></ul></body></html>","text":"The equal vs cap weighted Anomaly is getting more anomalous… 👀🤔 Normally in the long-run the equal-weighted version of the S&P500 $S&P 500(.SPX)$ outperforms the cap-weighted (for a number of good reasons) — the more recent dominance of cap-weight is an anomaly. It's also an echo of the dot-com bubble era (many such echoes), and that could be an issue. There is a chance this resolves via “Bullish Rotation“, but more likely the way it reverts (if/when it does!) would be through weakness in mega-caps. Line chart displaying the ratio of S&P500 equal-weighted index to market cap-weighted index over time from 1980 to 2024. The y-axis ranges from 1 to 4 representing the ratio value. The x-axis shows years from 80 to 24. A blue line traces the ratio trend starting low in the 1980s rising gradually with peaks around 2000 and recent divergence post-2020. For SG users only, a tool to boost your purchasing power and trading ideas with a Cash Boost Account! Welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with upcoming 0-commission, unlimited trading on SG, HK, and US stocks, as well as ETFs. Find out more here. Other helpful links: 💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉 🎉The Cash Boost “Daily Draws” is Now Live – Come Join the Fun! How to open a CBA. How to link your CDP account. Other FAQs on CBA. Cash Boost Account Website.","highlighted":1,"essential":1,"paper":2,"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/494402241344264","repostId":0,"isVote":1,"tweetType":1,"viewCount":557,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[".SPX"],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":1158,"optionInvolvedFlag":false,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/494402241344264"}