• Russell 2000 Index Had Highest Weight to Firms with Negative Earning – We feel it is important to highlight that over 20% of the Russell 2000 Index is in stocks that had negative earnings over the past 12 months. It is important to be mindful of this fact when the Russell 2000 is used as a benchmark for small caps in general, because not all indexes are created the same.
1Michael Batnick, The Irrelevant Investor, 7/18/14 (theirrelevantinvestor.tumblr.com/post/92145310258/if-mr-market-took-a-selfie).
2WisdomTree, Bloomberg, as of 7/17/14.
Important Risks Related to this Article
Investments focusing on certain sectors and/or smaller companies increase their vulnerability to any single economic or regulatory development.