No. of Recommendations: 18
The return of an equal-weight index like the RSP, over the long-term, is almost certain to be better than the cap-weighted equivalent like the S&P500. And the best time to invest in RSP is when the S&P500 has gotten way ahead of the RSP, like right now. In fact, the very best time is probably when that S&P's outperformance has been so dramatic, and has been going on for such a long time, that people are throwing in the towel and switching back from the losing RSP to the winning S&P, or, perhaps as in your case, just resigning themselves to getting RSP's middling returns forever!
And even if that's wrong and the biggest firms continue (against almost all history) to be the best picks, you still won't do badly. And peak company specific risk is 1/38 as big, so sleepin' is easy.
Personally I'd roll my own index, but that's just me. Top 30% of S&P 500 firms by ROE, equal weight quarterly, still beat the S&P 500 by around 1.2%/year in the 20 years to 2024, even with the roar of the Mags lately. And it lets you skip the occasional thing you wouldn't feel comfortable owning. Top 30% by 5-year sales growth did even a bit better, though it's a bit rougher ride and isn't quite as universal a rule.
Jim
