Tracking S&P 500 vs Equal Weighted Index

The analysis of the S&P 500 index in comparison to the equal-weighted index reveals significant insights regarding market dynamics. The S&P 500 is weighted by market capitalization, which disproportionately favors the largest companies, resulting in skewed performance metrics. The current disparity between the S&P 500 index and the equal-weighted index is at its most extreme level since March 2000, a period that preceded the dot-com bubble. This extreme spread indicates a potential over-concentration in a few top companies, raising concerns about market stability and the implications for investment strategies.