The main drawback with cap weighted investing is that you have bought the market. We know from history and experience the market is not always a good deal. There are times when the market is overvalued. Your entry point (level) into the market is very important for both your short and long term returns. Buying into the market when it is overvalued is likely to result in less than average returns. If you are worried about the valuation level of the market, then perhaps the best approach if you have a lump sum to invest is to set a disciplined schedule to invest those monies over time based upon either a time target being reached, ie. invest 1/4 now, 1/4 in three months, 1/4 in six months, etc., and/or dependent upon the market level path, ie. if the market goes down 10% invest 1/4, if down another 5% then another 1/4, etc.
If you are young and likely to be putting regular savings into the market, then don't worry about trying to finesse your entry. You've got time and the lion's share of your likely accumulated wealth in front of you and there is no time like the present to start investing.
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