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How do I calculate equally-weighted index with monthly rebalancing?

How do I calculate equally-weighted index with monthly rebalancing?

Postby delsy89 » Sat May 04, 2013 8:12 pm

1. Equally weighted 'indexes' simply gives each stock an equal weight, regardless of stock price or market capitalization, so, obviously, stock splits and stock dividends will not affect an equally weighted index.

2. An equally weighted 'portfolio' would have the same amount of money invested in each unique stock. Therefore, the number of shares of each stock would be different, with more shares of cheaper stocks.

3. An equally weighted 'portfolio' would have to be 'rebalanced' more frequently to maintain equal weight, because stocks prices would diverge quickly.

4. For details, please read at:

http://thismatter.com/money/stocks/indexes/security-market-indexes.htm
delsy89
 
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