IB Net Payout Yields Model

NASDAQ-100 Index Additions to Ignore for Now

The data is undeniable -- being added to or removed from a major index has a dramatic impact on stock prices over the next six months to a year. The NASDAQ-100 index is doing its annual update effective Dec. 23. Based on research from Schaefer's and raw numbers from the 2012 updates, investors clearly do better investing in the group removed from the index over the short run.

For 2012, the stocks added to the index gained in line with the NASDAQ-100 over both the six-month and 12-month periods. The removals from the index actually smashed the index with an average six-month gain of 43.5% versus 8% for the index. The 12-month numbers were not as impressive, but still very strong at nearly 69% versus 32% for the index.

Read the full article here.

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