Indexing: Cheating The Market Bingo

I got a lot of heated emails after the previous post regarding how picking individual stocks is for losers and Indexing was a more predictable strategy. In all the emails, none of the whiners could produce a portfolio that could out preform the S&P 500, Dow 30, or the NASDAQ 100. Another laughable response is a portfolio of after the fact, winning stocks for 2016 built entirely by The Texas Sharp Shooter Fallacy. There was some listing of individual stocks that people suggested investing in, but most of these are essentially part of one of these three indexes. So when your aunt sue recommended you get into Amazon, or you had a hankering to buy some Apple or Tesla, turns out you already had it if you were in all three of these indexes. The vastness of companies encompassed by what the major index funds may be surprising so, I compiled a list (thanks to wikipedia) of all the companies below with what index they belong with:

Company Symbol S&P 500 DOW 30 NASDAQ 100
3M MMM X X
Abbott Laboratories ABT X
AbbVie ABBV X
Accenture plc ACN X
Activision Blizzard ATVI X X
Acuity Brands Inc AYI X
Adobe Systems Inc ADBE X X
Advance Auto Parts AAP X
AES Corp AES X
Aetna Inc AET X
Affiliated Managers Group Inc AMG X
AFLAC Inc AFL X
Agilent Technologies Inc A X
Air Products & Chemicals Inc APD X
Akamai Technologies Inc AKAM X X
Alaska Air Group Inc ALK X
Albemarle Corp ALB X
Alexion Pharmaceuticals ALXN X X
Allegion ALLE X
Allergan, Plc AGN X
Alliance Data Systems ADS X
Alliant Energy Corp LNT X
Allstate Corp ALL X
Alphabet Inc Class A GOOGL X X
Alphabet Inc Class C GOOG X X
Altria Group Inc MO X
Amazon.com Inc AMZN X X
Ameren Corp AEE X
American Airlines Group AAL X X
American Electric Power AEP X
American Express Co AXP X X
American International Group, Inc. AIG X
American Tower Corp A AMT X
American Water Works Company Inc AWK X
Ameriprise Financial AMP X
AmerisourceBergen Corp ABC X
AMETEK Inc AME X
Amgen Inc AMGN X X
Amphenol Corp APH X
Anadarko Petroleum Corp APC X
Analog Devices, Inc. ADI X X
Anthem Inc. ANTM X
Aon plc AON X
Apache Corporation APA X
Apartment Investment & Mgmt AIV X
Apple Inc. AAPL X X X
Applied Materials Inc AMAT X X
Archer-Daniels-Midland Co ADM X
Arconic Inc ARNC X
Arthur J. Gallagher & Co. AJG X
Assurant Inc AIZ X
AT&T Inc T X
Autodesk Inc ADSK X X
Automatic Data Processing ADP X X
AutoNation Inc AN X
AutoZone Inc AZO X
AvalonBay Communities, Inc. AVB X
Avery Dennison Corp AVY X
Baidu.com BIDU X
Baker Hughes Inc BHI X
Ball Corp BLL X
Bank of America Corp BAC X
Bard (C.R.) Inc. BCR X
Baxter International Inc. BAX X
BB&T Corporation BBT X
Becton Dickinson BDX X
Bed Bath & Beyond BBBY X
Berkshire Hathaway BRK-B X
Best Buy Co. Inc. BBY X
BIOGEN IDEC Inc. BIIB X X
BioMarin Pharmaceutical BMRN X
BlackRock BLK X
Block H&R HRB X
Boeing Company BA X X
BorgWarner BWA X
Boston Properties BXP X
Boston Scientific BSX X
Bristol-Myers Squibb BMY X
Broadcom AVGO X X
Brown-Forman Corporation BF-B X
C. H. Robinson Worldwide CHRW X
CA, Inc. CA X X
Cabot Oil & Gas COG X
Campbell Soup CPB X
Capital One Financial COF X
Cardinal Health Inc. CAH X
Carmax Inc KMX X
Carnival Corp. CCL X
Caterpillar Inc. CAT X X
CBRE Group CBG X
CBS Corp. CBS X
Celgene Corp. CELG X X
Centene Corporation CNC X
CenterPoint Energy CNP X
CenturyLink Inc CTL X
Cerner CERN X X
CF Industries Holdings Inc CF X
Charles Schwab Corporation SCHW X
Charter Communications CHTR X X
Check Point Software CHKP X
Chesapeake Energy CHK X
Chevron Corp. CVX X X
Chipotle Mexican Grill CMG X
Chubb Limited CB X
Church & Dwight CHD X
CIGNA Corp. CI X
Cimarex Energy XEC X
Cincinnati Financial CINF X
Cintas Corporation CTAS X X
Cisco Systems CSCO X X X
Citigroup Inc. C X
Citizens Financial Group CFG X
Citrix Systems CTXS X X
CME Group Inc. CME X
CMS Energy CMS X
Coach Inc. COH X
Coca Cola Company KO X X
Cognizant Technology Solutions CTSH X X
Colgate-Palmolive CL X
Comcast A Corp CMCSA X X
Comerica Inc. CMA X
ConAgra Foods Inc. CAG X
Concho Resources CXO X
ConocoPhillips COP X
Consolidated Edison ED X
Constellation Brands STZ X
Corning Inc. GLW X
Costco Co. COST X X
Coty, Inc COTY X
Crown Castle International Corp. CCI X
CSRA Inc. CSRA X
CSX Corp. CSX X X
Ctrip International CTRP X
Cummins Inc. CMI X
CVS Health CVS X
D. R. Horton DHI X
Danaher Corp. DHR X
Darden Restaurants DRI X
DaVita Inc. DVA X
Deere & Co. DE X
Delphi Automotive DLPH X
Delta Air Lines DAL X
Dentsply Sirona XRAY X X
Devon Energy Corp. DVN X
Digital Realty Trust DLR X
Discover Financial Services DFS X
Discovery Communications-A DISCA X X
Discovery Communications-C DISCK X X
Dish Network DISH X
Dollar General DG X
Dollar Tree DLTR X X
Dominion Resources D X
Dover Corp. DOV X
Dow Chemical DOW X
Dr Pepper Snapple Group DPS X
DTE Energy Co. DTE X
Du Pont (E.I.) DD X X
Duke Energy DUK X
Dun & Bradstreet DNB X
DuPont DD X
E*Trade ETFC X
Eastman Chemical EMN X
Eaton Corporation ETN X
eBay Inc. EBAY X X
Ecolab Inc. ECL X
Edison Int’l EIX X
Edwards Lifesciences EW X
Electronic Arts EA X X
Emerson Electric Company EMR X
Endo International ENDP X
Entergy Corp. ETR X
Envision Healthcare Corp EVHC X
EOG Resources EOG X
EQT Corporation EQT X
Equifax Inc. EFX X
Equinix EQIX X
Equity Residential EQR X
Essex Property Trust, Inc. ESS X
Estee Lauder Cos. EL X
Eversource Energy ES X
Exelon Corp. EXC X
Expedia Inc. EXPE X X
Expeditors Int’l EXPD X
Express Scripts ESRX X X
Extra Space Storage EXR X
Exxon Mobil Corp. XOM X X
F5 Networks FFIV X
Facebook FB X X
Fastenal Co FAST X X
Federal Realty Investment Trust FRT X
FedEx Corporation FDX X
Fidelity National Information Services FIS X
Fifth Third Bancorp FITB X
First Solar Inc FSLR X
FirstEnergy Corp FE X
Fiserv Inc FISV X X
FLIR Systems FLIR X
Flowserve Corporation FLS X
Fluor Corp. FLR X
FMC Corporation FMC X
FMC Technologies Inc. FTI X
Foot Locker Inc FL X
Ford Motor F X
Fortive Corp FTV X
Fortune Brands Home & Security FBHS X
Franklin Resources BEN X
Freeport-McMoran Cp & Gld FCX X
Frontier Communications FTR X
Gap (The) GPS X
Garmin Ltd. GRMN X
General Dynamics GD X
General Electric GE X X
General Growth Properties Inc. GGP X
General Mills GIS X
General Motors GM X
Genuine Parts GPC X
Gilead Sciences GILD X X
Global Payments Inc GPN X
Goldman Sachs Group GS X X
Goodyear Tire & Rubber GT X
Grainger (W.W.) Inc. GWW X
Halliburton Co. HAL X
Hanesbrands Inc HBI X
Harley-Davidson HOG X
Harman Int’l Industries HAR X
Harris Corporation HRS X
Hartford Financial Svc.Gp. HIG X
Hasbro Inc. HAS X X
HCA Holdings HCA X
HCP Inc. HCP X
Helmerich & Payne HP X
Henry Schein HSIC X X
Hess Corporation HES X
Hewlett Packard Enterprise HPE X
Hologic HOLX X X
Home Depot HD X X
Honeywell Int’l Inc. HON X
Hormel Foods Corp. HRL X
Host Hotels & Resorts HST X
HP Inc. HPQ X
Humana Inc. HUM X
Huntington Bancshares HBAN X
IBM IBM X X
Illinois Tool Works ITW X
Illumina Inc ILMN X X
Incyte Corporation INCY X
Ingersoll-Rand PLC IR X
Intel Corp. INTC X X X
Intercontinental Exchange ICE X
International Business Machines IBM X
International Paper IP X
Interpublic Group IPG X
Intl Flavors & Fragrances IFF X
Intuit Inc. INTU X X
Intuitive Surgical Inc. ISRG X X
Invesco Ltd. IVZ X
Iron Mountain Incorporated IRM X
J. B. Hunt Transport Services JBHT X
JD.com JD X
Jacobs Engineering Group JEC X
JM Smucker SJM X
Johnson & Johnson JNJ X X
Johnson Controls International JCI X
JPMorgan Chase & Co. JPM X X
Juniper Networks JNPR X
Kansas City Southern KSU X
Kellogg Co. K X
KeyCorp KEY X
Kimberly-Clark KMB X
Kimco Realty KIM X
Kinder Morgan KMI X
KLA-Tencor Corp. KLAC X X
Kohl’s Corp. KSS X
Kraft Heinz Co KHC X X
Kroger Co. KR X
L Brands Inc. LB X
L-3 Communications Holdings LLL X
Laboratory Corp. of America Holding LH X
Lam Research LRCX X X
Leggett & Platt LEG X
Lennar Corp. LEN X
Leucadia National Corp. LUK X
Level 3 Communications LVLT X
Liberty Global plc Ordinary A LBTYA X
Liberty Global plc Ordinary A LBTYK X
Liberty Interactive LVNTA X
Liberty Interactive LBTYK X
Lilly (Eli) & Co. LLY X
Lincoln National LNC X
Linear Technology Corp. LLTC X
LKQ Corporation LKQ X
Lockheed Martin Corp. LMT X
Loews Corp. L X
Lowe’s Cos. LOW X
LyondellBasell LYB X
M&T Bank Corp. MTB X
Macerich MAC X
Macy’s Inc. M X
Mallinckrodt Plc MNK X
Marathon Oil Corp. MRO X
Marathon Petroleum MPC X
Marriott Int’l. MAR X X
Marsh & McLennan MMC X
Martin Marietta Materials MLM X
Masco Corp. MAS X
Mastercard Inc. MA X
Mattel Inc. MAT X X
Maxim Integrated Products MXIM X
McCormick & Co. MKC X
McDonald’s Corp. MCD X X
McKesson Corp. MCK X
Mead Johnson MJN X
Medtronic plc MDT X
Merck & Co. MRK X X
MetLife Inc. MET X
Mettler Toledo MTD X
Michael Kors Holdings KORS X
Microchip Technology MCHP X X
Micron Technology MU X X
Microsoft Corp. MSFT X X X
Mid-America Apartments MAA X
Mohawk Industries MHK X
Molson Coors Brewing Company TAP X
Mondelez International MDLZ X X
Monsanto Co. MON X
Monster Beverage MNST X X
Moody’s Corp MCO X
Morgan Stanley MS X
Motorola Solutions Inc. MSI X
Murphy Oil MUR X
Mylan N.V. MYL X X
NASDAQ OMX Group NDAQ X
National Oilwell Varco Inc. NOV X
Navient NAVI X
NetApp NTAP X
NetEase, Inc. NTES X
Netflix Inc. NFLX X X
Newell Brands NWL X
Newfield Exploration Co NFX X
Newmont Mining Corp. (Hldg. Co.) NEM X
News Corp. Class A NWSA X
News Corp. Class B NWS X
NextEra Energy NEE X
Nielsen Holdings NLSN X
Nike NKE X X
NiSource Inc. NI X
Noble Energy Inc NBL X
Nordstrom JWN X
Norfolk Southern Corp. NSC X
Northern Trust Corp. NTRS X
Northrop Grumman Corp. NOC X
Norwegian Cruise Line Holdings NCLH X
NRG Energy NRG X
Nucor Corp. NUE X
Nvidia Corporation NVDA X X
NXP Semiconductors NXPI X
O’Reilly Automotive ORLY X X
Occidental Petroleum OXY X
Omnicom Group OMC X
ONEOK OKE X
Oracle Corp. ORCL X
PACCAR Inc. PCAR X X
Parker-Hannifin PH X
Patterson Companies PDCO X
Paychex Inc. PAYX X X
PayPal PYPL X X
Pentair Ltd. PNR X
People’s United Financial PBCT X
PepsiCo Inc. PEP X
PerkinElmer PKI X
Perrigo PRGO X
Pfizer Inc. PFE X X
PG&E Corp. PCG X
Philip Morris International PM X
Phillips 66 PSX X
Pinnacle West Capital PNW X
Pioneer Natural Resources PXD X
Pitney-Bowes PBI X
PNC Financial Services PNC X
Polo Ralph Lauren Corp. RL X
PPG Industries PPG X
PPL Corp. PPL X
Praxair Inc. PX X
Priceline.com Inc PCLN X X
Principal Financial Group PFG X
Procter & Gamble PG X X
Progressive Corp. PGR X
Prologis PLD X
Prudential Financial PRU X
Public Serv. Enterprise Inc. PEG X
Public Storage PSA X
Pulte Homes Inc. PHM X
PVH Corp. PVH X
Qorvo QRVO X
QUALCOMM Inc. QCOM X X
Quanta Services Inc. PWR X
Quest Diagnostics DGX X
Range Resources Corp. RRC X
Raytheon Co. RTN X
Realty Income Corporation O X
Red Hat Inc. RHT X
Regeneron REGN X X
Regions Financial Corp. RF X
Republic Services Inc RSG X
Reynolds American Inc. RAI X
Robert Half International RHI X
Rockwell Automation Inc. ROK X
Rockwell Collins COL X
Roper Industries ROP X
Ross Stores ROST X X
Royal Caribbean Cruises Ltd RCL X
Ryder System R X
SBA Communications SBAC X
S&P Global, Inc. SPGI X
Salesforce.com CRM X
SCANA Corp SCG X
Schlumberger Ltd. SLB X
Scripps Networks Interactive Inc. SNI X
Seagate Technology STX X X
Sealed Air SEE X
Sempra Energy SRE X
Sherwin-Williams SHW X
Shire plc PHPG X
Signet Jewelers SIG X
Simon Property Group Inc SPG X
Sirius XM Radio, Inc. SIRI X
Skyworks Solutions SWKS X X
SL Green Realty SLG X
Snap-On Inc. SNA X
Southern Co. SO X
Southwest Airlines LUV X
Southwestern Energy SWN X
Spectra Energy Corp. SE X
St Jude Medical STJ X
Stanley Black & Decker SWK X
Staples Inc. SPLS X
Starbucks Corp. SBUX X X
State Street Corp. STT X
Stericycle Inc SRCL X
Stryker Corp. SYK X
SunTrust Banks STI X
Symantec Corp. SYMC X X
Synchrony Financial SYF X
Sysco Corp. SYY X
T. Rowe Price Group TROW X
Target Corp. TGT X
TE Connectivity Ltd. TEL X
Tegna, Inc. TGNA X
Teradata Corp. TDC X
Tesla Motors, Inc. TSLA X
Tesoro Petroleum Co. TSO X
Texas Instruments TXN X X
Textron Inc. TXT X
The Bank of New York Mellon Corp. BK X
The Clorox Company CLX X
The Cooper Companies COO X
The Hershey Company HSY X
The Home Depot HD X
The Mosaic Company MOS X
The Travelers Companies Inc. TRV X
The Walt Disney Company DIS X
Thermo Fisher Scientific TMO X
Tiffany & Co. TIF X
Time Warner Inc. TWX X
TJX Companies Inc. TJX X
T-Mobile US TMUS X
Torchmark Corp. TMK X
Total System Services TSS X
Tractor Supply Company TSCO X X
TransDigm Group TDG X
Transocean RIG X
Travelers TRV X X
TripAdvisor TRIP X X
Twenty-First Century Fox Class A FOXA X X
Twenty-First Century Fox Class B FOX X X
Tyson Foods TSN X
U.S. Bancorp USB X
UDR Inc UDR X
Ulta Salon Cosmetics & Fragrance Inc ULTA X X
Under Armour UA X
Under Armour UAA X
Union Pacific UNP X
United Continental Holdings UAL X
United Health Group Inc. UNH X X
United Parcel Service UPS X
United Rentals, Inc. URI X
United Technologies UTX X X
UnitedHealth Group UNH X
Universal Health Services, Inc. UHS X
Unum Group UNM X
Urban Outfitters URBN X
V.F. Corp. VFC X
Valero Energy VLO X
Varian Medical Systems VAR X
Ventas Inc VTR X
Verisign Inc. VRSN X
Verisk Analytics VRSK X X
Verizon Communications VZ X X
Vertex Pharmaceuticals Inc VRTX X X
Viacom Inc. VIAB X X
Visa Inc. V X X
Vodafone Group, Plc VOD X
Vornado Realty Trust VNO X
Vulcan Materials VMC X
Wal-Mart Stores WMT X X
Walgreens Boots Alliance WBA X X
Walt Disney DIS X X
Waste Management Inc. WM X
Waters Corporation WAT X
Wec Energy Group Inc WEC X
Wells Fargo WFC X
Welltower Inc. HCN X
Western Digital WDC X X
Western Union Co WU X
WestRock Company WRK X
Weyerhaeuser Corp. WY X
Whirlpool Corp. WHR X
Whole Foods Market WFM X
Williams Cos. WMB X
Willis Towers Watson WLTW X
Wyndham Worldwide WYN X
Wynn Resorts Ltd WYNN X
Xcel Energy Inc XEL X
Xerox Corp. XRX X
Xilinx Inc XLNX X X
XL Capital XL X
Xylem Inc. XYL X
Yahoo Inc. YHOO X X
Yum! Brands Inc YUM X
Zimmer Biomet Holdings ZBH X
Zions Bancorp ZION X
Zoetis ZTS X

So there you have it! When Jack Bogle suggested the index fund in his 1952 senior thesis he was immediately criticized by active fund managers stating that “passive investing is worse than Marxism”. Essentially to buy shares of every company in the index is like buying every bingo card in the bingo hall. Some are winners, some will lose value, but over all you are up 13% this past year. You essentially own the entire market by weight by indexing. No need to pick the winning companies!

The index fund turned 40 years old last year and has been wildly successful and super cheap. It shines by consistently outperforming the majority of actively managed funds. Yet every year since 1976, people dismiss it as a terrible investment choice, that they can simply do better! Unfortunately math is math, the index always wins, but people are gamblers and love to have that “hot” stock pick. Don’t gamble with your retirement! Stick with TSP and its cheap index funds.

-Derp

Leave a Reply

Your email address will not be published. Required fields are marked *