The markets are volatile and unpredictable. So much so that there are indices that track the boom and crash of the market. The Investors Intelligence Daily Crash 1000 Index is based on average returns of stocks in the S&P 500 where each stock’s weighting is equal to its rank in the index. The higher or lower your weighting, the more or less you contribute to the index for that day.

This article will go over what the index is, how it works, and how you can use it to learn about investing.

What is the Crash 1000 Index?

The Investors Intelligence Daily Crash 1000 Index is based on average returns of stocks in the S&P 500 where each stock’s weighting is equal to its rank in the index. The higher or lower your weighting, the more or less you contribute to the index for that day.

What does this mean? It means that if you own a company ranked at 100 and sell it, then all of your contribution will be used to calculate the return for that day. But if you own a company ranked at 500, only 50% of your contribution will be used to calculate the return for that day.

If you want to invest in low-risk investments (like stocks) but are worried about the volatility, this index may be right for you! It allows you to still participate in booming markets without risking too much capital.

How the index works

The Investors Intelligence Daily Crash 1000 Index is based on the average returns of stocks in the S&P 500 where each stock’s weighting is equal to its rank in the index. The higher or lower your weighting, the more or less you contribute to the index for that day.

For example, if an investor owns 20 shares of Company X and Company Y, then their holdings would be weighted as follows:

Company X: 80%

Company Y: 20%

This means that Company X would account for 80% of your holdings and Company Y would only account for 20%.

What does a crash or boom mean?

The market can be volatile, so it’s important to understand what a crash or boom means.

The “Crash Index” measures the average daily return of stocks in the S&P 500. A crash is when stocks return more than -6% in a day. If stocks return less than -6%, then it’s considered a boom. So when the results are over 6%, it’s called a boom, and when they’re below 6%, it’s called a crash.

A crash is when one day your investments are worth significantly less than they were the day before, but booms are when they’re worth more. When you have crashes, you’ll see steep losses for the index in red on the graph. For booms, you’ll see green lines with large gains in them.

If you’ve invested in stocks in your portfolio and would like to know how your funds are doing each day, then the Investors Intelligence Daily Crash 1000 Index is perfect! It will tell you if there was an eventful day for your investments that might affect your holdings, so that you can monitor it closely and take action if necessary.

Conclusion

Do you want to know how the Crash 1000 Index works?

If so, keep reading. We will talk about what a crash or boom means, and how the index works.