Houge Study Pierces Conventional Wisdom

It is widely assumed that a stock's price will rise when it is added to a major stock-market index. As is often the case with conventional wisdom about the stock market, however, the truth is more complicated. In fact, a new study has found that over the long term, stocks that are dropped from an index generally outperform those that are added. The study's co-author is TODD HOUGE of the University of Iowa.

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