View from the Observation Deck

1. The chart above shows that, with the exception of 2011, the S&P 500 Equal Weighted Index outperformed the cap-weighted S&P 500 in the past 3-, 5-, 10- and 15-year periods.
2. Over the 15-year span, the S&P 500 Equal Weighted Index outperformed the cap-weighted index in 8 of the 15 calendar years. It matched the return on the S&P 500 in another (15.8% in 2006).
3. By equally weighting the 500 constituents in the S&P 500, each issue represents the same 0.2% weighting. By contrast, the largest weighted stock in the S&P 500 on 12/31/11 was Exxon Mobil at 3.57%.
4. Equally weighting positions gives the lower market cap companies more of an influence on performance. Mid-cap stocks have dominated their large-cap counterparts over the past 15 years.
5. Even in the so-called lost decade (2000-2009), where the S&P 500 posted a cumulative loss of 9.1%, the S&P 500 Equal Weighted Index posted a cumulative total return of 65.1%.
6. So there is one more thing for investors to think about...it's not just what you own, it's how you own it.