The whole point of investing in stocks is to choose one that has the greatest chance of a rising share value. Don’t we all look for a stock that we could buy for $10 and later on sell for $300 per share? Well, how can we proceed to accomplish such a feat? What would make a stock rise so much?
Modified capitalization weighting involves adjustments to the capitalizations of the various component issues of the Nasdaq-100 index. The NDX contract at the CBOE is based on Nasdaq-100 as is the MNX. The Nasdaq-100 is a modified capitalization weighted index.
There are hundreds of ETFs and HOLDRS covering key industry benchmarks such as the various Standard & Poor Indexes, Russell Indexes and the Dow Jones Averages or other less well known narrow based sectors.
