equity recap: rebalancing
or should I say dear Herb?
I have two less-than-intelligent questions, probably.
1. Why don’t market-cap and price-cap weightings need rebalancing, while the equal-weighting does?
For equal-weighting, if you choose 10 stocks, they will all be weighted 10%. So, why would you need rebalancing, even when their price changes? You’ll still have 10 stocks (so, looking at the NUMBER, not the price)
2. Why does equal-weighting have a bias towards small-cap?
Thanks a bunch,
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