Looking at the quote change of the S&P500 compared the RSP does not account for the underlying mechanics.

Imagine two large 1m analog clocks moving up a 3m wall on a rope, one taking 10 minutes to reach the top, and the other taking 8 minutes to reach the top. Imagine it is dark and the two clock's second hands have an LED lights at their tip. The lights move up the wall but in spirals, often moving up and often moving down.

To make a bet on which light will reach the top of the wall first, what you want to track is the fixed rate of change of the clock moving, not the rate of chance of the clock's second hand movement.

You also may see the pattern, and avoid the clock in which the light has recently zoomed up, working out that it usually slows down after that, and better to find the hand that has recently fallen downwards.

If in doubt, ignore the LEDs completely, and try to work out which clock is moving up the wall faster, then bet on its hand over the long-term - that works well for walls that are 10 or more meters high.

As this subject relates more to index investing, I have written my post on the Index Investing board:

Manlobbi writes on S&P500 sales growth & multiple

- Manlobbi