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To: Don Lloyd who wrote (264909)	10/28/2003 11:39:00 AM
From: Perspective	Respond to of 436258

Since many favorites seem to get added to the indicies, the best approach might be to buy the index, gradually short those that are kicked out, and gradually add the ones that are added to the index. You'd be long the old timers in the index, plus short the rejects, plus legging into recent additions. An interesting thought, for sure. I should have added: the primary benefit of indexing, I believe, actually comes not from the new additions, but from the automatic cutting of losses as secular failures get the boot. Hence my strategy: focus on shorting those that get the boot, hedged against the mainstays of the index. BC

To: Don Lloyd who wrote (264909)	10/28/2003 4:17:06 PM
From: Mark Adams	Read Replies (1) \| Respond to of 436258

I suspect a rhetorical query; nonetheless... moneycentral.msn.com I haven't seen anything on how 'deleted' stocks do over the longer term.

To: Don Lloyd who wrote (264909)	10/28/2003 8:20:40 PM
From: GraceZ	Respond to of 436258

That brings up the question as to which investment portfolio would give better results, one in which you only buy the stocks which are added to the index, and one in which you only buy the stocks that are deleted. Well this brings up the point that some indices chase performance the same way the public does. We could say that the stocks that are deleted belong to a group that could be described as "value" and the ones that are added are more likely to belong to the group we call "growth". There are times when value as a group outperforms growth as a group and visa versa. It may not be possible to tell what kind of period we're in until after the fact. It's always glaringly obvious in the rear view mirror.