"All you have to do is to look at the balance sheet and earnings growth, and that will show you that in general, corporate America has done very well in the past 10 years," David Spika, who helps oversee $12 billion as an investment strategist at Westwood Holdings Group Inc. in Dallas, said in a phone interview on Dec. 1. "You are seeing a much healthier corporate America today than you saw 10 or 12 years ago."

Companies in the S&P 500 are poised to report record earnings of $99.05 a share for 2011 and profits may rise 10 percent next year and 12 percent in 2013, based on analyst forecasts compiled by Bloomberg.

The decline in the S&P 100, whose companies have an average market capitalization of $73.9 billion, has reduced valuations to 35 percent below the mean of 18.6 since 1997, data compiled by Bloomberg show. The index trades for 12.1 times reported earnings, 7.6 percent lower than the S&P 500, the data show.

Smaller companies lifted the S&P 500 Equal Weighted Index to a record on May 10, almost four years after the capitalization-based gauge reached its all-time high of 1,565.15 in October 2007.

"That cycle is running its course," Matt Peron, a money manager at Northern Trust Corp. in Chicago, said in a telephone interview on Dec. 1. His firm manages $644 billion. "I'm not saying it's over, but it's getting longer in the tooth. Mega- caps are looking very cheap."

The Russell 2000 Index, a gauge of small-cap shares with an average market value of $667.8 million, peaked on April 29 and is up 28 percent since March 24, 2000. Equity benchmarks did worse than corporate bonds, which returned 121 percent, according to the Bank of America Merrill Lynch U.S. Corporate & High Yield Master Index.

The relative performance of smaller stocks doesn't help the majority of investors. More than $5.58 trillion is benchmarked to the S&P 500 and about $1.31 trillion is directly linked to its value, according to an estimate by New York-based S&P. The biggest 100 companies make up 63 percent of the value of the S&P 500 and almost half of the entire American market.

Individuals pulled $9.01 billion from equity mutual funds since March 2000, with withdrawals exceeding $27 billion each year starting in 2007, according to data compiled by Bloomberg from the Investment Company Institute, a Washington-based trade group.

Gains in the equal-weighted index reflect appreciation in its smaller companies and stocks with lower valuations over the past decade, according to Asness, who helps oversee $38.8 billion as founder and president of the AQR hedge fund in Greenwich, Connecticut. Since most investors didn't anticipate that, they weren't spared the lost decade, he said.

"Sorry, I'm not sure it means more than small-cap and cheap stocks had a good decade," Asness wrote in an e-mail. "If you add us all up, we add up to cap-weighted, not equal- weighted indexes."