In the past, we've made comments regarding the disadvantages of "weighted" market indices.  Here's a link on the subject:  http://www.decisionpoint.com/Glossary/Unweighted.html .

The article makes some interesting observations.  About 70% of the S&P 500's weighting is in 50 (10%) of the index's stocks.  Despite the "500" moniker, the index really doesn't serve an individual investor who gives equal weight to each stock he buys. Weighting gives some idea of a country's economic strength, but doesn't necessarily serve the individual stock investor.

Almost all of the indices out there are weighted.  The author constructs an unweighted approximation of the S&P 500 and finds it has outperformed the S&P 500 considerably over the last 13 years.  The performance was particularly strong relative to the weighted index from the year 2000 to the present, while the unweighted index was relatively weak in the mid to late 90's...the author reasons that this was the period when "indexing", the purchase of index funds, became popular, so money became concentrated in stocks with a heavy weighting.  

It's interesting to speculate on what the effects of the mass public investing heavily in these sorts of weighted indices are and could be in the future.  Taken to an extreme, of course, small caps get entirely ignored in this investment environment.

Here's a link to some "equal-weighted" indices... http://finance.yahoo.com/l?s=ewi&t=I&m=US .  Value Line has one, as well as Zweig.

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