Barbara Friedberg

When a stock leaves an index, don't stop looking. "Index inclusion is prestige. It is a coronation, not a guarantee of future returns. Index deletion is an embarrassment, not proof of permanent failure." This simple idea challenges one of investing's most common assumptions. For many investors, joining a major benchmark feels like validation while deletion feels like failure. Our research suggests the opposite reaction may sometimes be warranted. Key Insights: Index membership reflects where a company has been, not necessarily where it is going. Instead of celebrating every addition or dismissing every deletion, investors may benefit from asking a different question: Has the market's expectations become too optimistic... or too pessimistic? That shift in perspective can lead to better investment decisions than relying on index membership alone. Read the full article on the Research Affiliates website: researchaffiliates.com/insig… #ValueInvesting #IndexInvesting #CapitalMarkets #AssetManagement #ResearchAffiliates Disclosures: na2.hubs.ly/H05dcMn0