Market capitalisation-weighted investing may allow you to collect yesterday’s blooms, but investors need a more nuanced approach if they are to seize opportunities that will blossom tomorrow.
I was buying a bunch of flowers last week. Ever the romantic, when selecting a bunch, I wanted to get something beautiful - yes - but I also wanted to get my money's worth. I wanted a colourful bunch that would be in flower for as long as possible. This might seem like a sensible approach when it comes to something simple like buying a bunch of flowers, but it is rarely adopted in more complex transactions, like investing. Warren Buffett's Berkshire Hathaway bets on Diageo Market capitalisation-weighted investing is a widely popular investment strategy. It involves buying stocks...
To continue reading this article...
Join Investment Week for free
Signup and gain exclusive members-only insights - all free of charge!
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes
