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Posts Tagged ‘Henry Fernandez’

Index based investment using a company’s total stock market value is a great concept and indexes such as the S&P 500 generally provide solid low cost diversification.

Unfortunately, Wall Street has now applied this concept to “sectors” of the stock market without adjusting for the size of individual companies.  This is not only exposing investors to added risk due to poor diversification yet also handicapping newer smaller companies on which the future economy is dependent.

Let’s take a look at the two largest holdings in the MSCI Health Care Sector Index.  An index used by more than 97 percent of all large fund managers.

Screen Shot 2017-08-23 at 12.32.14 PM.png      Screen Shot 2017-08-23 at 12.37.00 PM.png

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