{"id":2094093,"date":"2018-12-04T16:58:26","date_gmt":"2018-12-04T11:28:26","guid":{"rendered":"http:\/\/stockviz.biz\/index.php\/?p=2094093"},"modified":"2018-12-04T16:58:26","modified_gmt":"2018-12-04T11:28:26","slug":"russell-3000-and-the-cap-weight-opt-out","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2018\/12\/04\/russell-3000-and-the-cap-weight-opt-out\/","title":{"rendered":"Russell 3000 and the Cap-Weight opt-out"},"content":{"rendered":"<p>At first, the US Russell 3000 Value index (RAV) out-performed Growth (RAG) for over 6 years. Then 2008 happened and everything got crushed. Since then, Growth has out-performed Value by a huge margin.<br \/>\n<a href=\"https:\/\/github.com\/stockviz\/blog\/raw\/master\/russell%203000\/r3000.cumulative.png\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/github.com\/stockviz\/blog\/raw\/master\/russell%203000\/r3000.cumulative.png\" width=\"1400\" height=\"800\" alt=\"Russell 3000 growth vs. value\" class=\"alignnone size-full\" \/><\/a><\/p>\n<p>Look at the chart closely, however, and you will notice that plain-vanilla cap-weight (RUA) is bang in the middle. Sure, it trailed Growth by about 60% cumulated over 15 years. But equities are only a part of a diversified portfolio and going cap-weight doesn&#8217;t require you to choose between Growth and Value &#8211; an endless debate that even academics are divided over. Cap-weight is <em>good enough<\/em>.<\/p>\n<p>Besides, Growth out-performed Value by a noticeable margin in only 4 out of 15 years. Otherwise, the returns have been more or less on par:<br \/>\n<a href=\"https:\/\/github.com\/stockviz\/blog\/raw\/master\/russell%203000\/r3000.annual.png\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/github.com\/stockviz\/blog\/raw\/master\/russell%203000\/r3000.annual.png\" width=\"3600\" height=\"1800\" alt=\"Russell 3000 growth vs. value annual returns\" class=\"alignnone size-full\" \/><\/a><\/p>\n<p>There will always be debate over which strategy is &#8220;better&#8221; but sometimes, given a choice between Chocolate Chip and Very Berry Strawberry, picking Vanilla and sticking with it over the long haul makes the most sense. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>At first, the US Russell 3000 Value index (RAV) out-performed Growth (RAG) for over 6 years. Then 2008 happened and everything got crushed. Since then, Growth has out-performed Value by a huge margin. Look at the chart closely, however, and you will notice that plain-vanilla cap-weight (RUA) is bang in the middle. Sure, it trailed &hellip; <\/p>\n","protected":false},"author":2,"featured_media":2065851,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3471],"tags":[960],"class_list":["post-2094093","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing-insight","tag-returns","entry"],"_links":{"self":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/2094093","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/comments?post=2094093"}],"version-history":[{"count":0,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/2094093\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media\/2065851"}],"wp:attachment":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media?parent=2094093"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/categories?post=2094093"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/tags?post=2094093"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}