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Posted by
Two Blokes Jun 10 -
Filed in
Stock
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6 views
RSP's equal-weight methodology forces it to sell winners and buy losers, limiting its ability to capture outsized gains from top-performing stocks. While RSP reduces concentration risk and offers sector diversification, its tilt toward smaller stocks increases volatility and drawdowns compared to SPY. Recent underperformance is likely to end as the earnings gap between 'Mag 7' and other S&P 500 stocks narrows, potentially setting up RSP for better relative returns in 2025.
