seccosiny

What about traditional value index funds, such as the cheap clothes online. By and large, value index funds select a group of stocks in an index like the Russell 1000 by a metric that reflects the least expensive companies. But they then rank them by market cap, not cheapness. So the same problems that apply to traditional index funds -- a tendency to wholesale designer clothing and punish bargain firms -- is also reflected in value index funds.

Value funds also are often out of wholesale clothing with the indexes they are drawn from, so the small investor often will have to watch as his investment underperforms the S&P 500 for months or even years at a stretch, which can be hard to stomach psychologically. A potential extra 7% a year is awfully tempting, but it may take a lot of cheap clothing stores to hold on until those profits materialize.