Creating an "Equal Weight" Index?
Author: Carova
Creation Date: 9/18/2015 3:14 AM
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Looked through the Topics and the various Help files but did not see anything on this subject.

Suppose that I wanted to create an index where all of the members were weighted equally (if 5 stocks, each would be 20%). How do I go about doing it?


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Seems like "Basic Index" is what you're looking for (Tools > Index-Lab).
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I also have this question.
How can one build a portfolio with two stocks (stock A and stock B). The idea is to have an equal amount of money in both stocks and rebalance periodically (e.g. once a week). Suppose we begin where both stocks are priced at $10 and we want to start the portfolio with $10,000. In this case, we want to allocate $5000 to A and $5000 to stock B. So we buy 500 shares of A and 500 shares of B. Suppose we rebalance once a week. The next week, stock A has increased to $12 and B stayed at $10. Now I have $11,000 that should be split equally again. So $5,500 in A and $5,500 in stock B. I need to have 458.33 shares of A and 550 shares of B. So sell 41.66 shares of A and buy 50 shares of B. Keep doing that for next week and the week after next etc.

I believe that the "basic index" represents a portfolio which is equally weighted at the start but is never rebalanced.
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Topic starter's question concerns creating an index (see User Guide > Index-Lab on what one is) while you're asking about an entirely different concept: portfolio rebalancing. Please search for and reuse a matching thread or simply start a new one.
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