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Article: Not singing the blues: Market-cap weighting of stock indexes gets a critical review; Wheeler takes on the 'conventional wisdom' of MPT.(News)
- Article from:
- Pensions & Investments
- Article date:
- August 9, 2004
CopyrightCOPYRIGHT 2004 Crain Communications, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: Joel Chernoff
CAMBRIDGE, Mass. - Everybody knows that investors in the U.S. stock market took a bath in the four years since the technology-stock bubble burst. Right?
Wrong. Yes, the broad-market Russell 3000 index lost more than $2 trillion of market value in the four-year period ended March 31, generating a cumulative return of -17.6%. Measurements from other indexes were worse: the S&P 500 returned -20.2% during the period, while the beleaguered Nasdaq returned -55.7%.
But the story for the average stock was vastly differently, according to Langdon B. Wheeler, president and chief investment officer of Numeric Investors LP, Cambridge, ...