rogernusbaum

Just a few quick tidbits. This chart compares the S&P 500 Index which is market cap weighted (the largest companies have the largest weightings) to the Invesco S&P 500 Equal Weight ETF (RSP) which as the name implies weights each of the 500 names equally.

Because of RSP's equal weighting, it is viewed as a better representation of the stock market and often, RSP outperforms for long periods of time including most of its first 15 years of trading. Normal, late, stock market cycle behavior is that the largest of the large caps outperform which is what the chart captures. It means only a handful of stocks, on this go around the largest tech companies, are carrying the index. RSP better captures what the "average" stock is doing and as you can see, the average stock is dramatically underperforming the few tech stocks at the top.

This is simply a negative indicator, it guarantees nothing but is a problem that the market would need to overcome to go higher.

I follow minimalist Joshua Becker on Twitter. He produces a lot of content and it's of interest to me; I like the ideas related to simplicity, avoiding consumerism and organization. He posted a video about how to maintain a minimalist lifestyle once you've decluttered and gotten organized. In the video he hit on avoiding consumerism, just buying stuff because it is stuff or because of the momentary happiness derived from making the purchase. Although not mentioned in this video, there is also the dimension of damaging your financial situation by going to far into debt or not saving money in favor of buying crap.

The idea that having less useless stuff or not spending on things that are unnecessarily expensive makes life simpler definitely resonates with me but at the same time, there is utility to having things that you need readily on hand. The pandemic is showing us that supply chains can be fragile. We've talked in recent posts about this and the benefit of upping preparedness a little. While I am not a fan of collecting $400 vintage Air Jordans (one extreme), Becker's goal of having just one of everything (as an extreme at the other end) may not be practical either. In this context getting too simple drifts into inconvenience or even making life more difficult. If the pandemic finds you with time on your hands to pair down, that's great but there are jobs that require two hammers (or whatever equivalent pertains to you).