Does the Index Tend to Top Tick Their Buys?
When AMD missed earnings earlier this week, the stock had a bad day losing nearly a quarter of its value. (Don't cry for shareholders as they are still up five fold from the 2016 lows.) But there was some chuckling going on toward the largest buyer of stocks in the market, the S&P 500 Index Fund, which just recently added the stock to its portfolio on March 20th. So while the Index missed the big move in the stock for the previous year, it unfortunately did catch this week’s sharp decline. That got some in the market thinking, do the indexes tend to be top tick buyers? Given the cap weighted nature of many indexes, do they tend to buy stocks after a big increase in market cap?
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