Invest Skeptically

Markit provides authoritative quotes for standardized structured finance and credit indices used in the credit derivatives markets. As these represent the cost of buying/selling credit default swap (CDS) protection against a basket of credits they can be a useful data point in evaluating the level of fear in the marketplace. As 2007 has [...]

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In a previous post I alluded to the fact that most mutual funds are benchmarked against some broad market index instead of a style index. While style indices are interesting–and arguably more “correct”–the reality is that market indices are the standard comparison for marketing purposes and market index returns are the kind of data [...]

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The most familiar indices, such as the S&P 500, are typically weighted by market capitalization (a notable exception being the DJIA which is an arithmetic average price). This means that larger companies like 3M get a proportionally larger weighting than smaller stocks like Paychex (just picked two companies at random). Market cap indices are [...]

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