Get back in balance with equal-weighted indices

Equal-weighted indices are one way to dilute the influence of mega-cap tech stocks in the US market.

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(Image credit: Getty Images)

Top-down investors who worry about how much the top seven tech stocks now dominate the US market have two obvious choices. 

The first is to avoid US stocks altogether. That may make sense tactically – for example, if you think that the gap between European and US stocks will narrow in the near term. However, for a longer-term asset allocation, it’s a very big decision to hold nothing in a country that accounts for about a quarter of the global economy, has the best record on economic growth and innovation, and shows a long history of delivering superior returns. Realistically, not many global investors are going to do that. 

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Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.