Anyone here can explain this Index IWM chart ? Weighting doesn't make sense to me

SunTrader · Aug 20, 2021

guru said:
If it went up 1500% again, it would add 45% to R2K.
Though the point is that any one stock that goes up by 200% (from $1 to $3) can replace 4 stocks that drop by 50% (each dropping from $1 to $0.50), or 8 stocks that drop by 25%. This is with small/equal weighing.
When a few companies get killed, the business is usually taken over by another one. Similarly with investors' money - they can move from several stocks into one, even without fundamentals.
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And if it dropped just about 50% from it's alltime high how much would it drop R2K?

Like it has done this year ..... so far.

guru · Aug 20, 2021

Also see:
https://www.elitetrader.com/et/threads/small-cap-managers-lead-year-of-meteoric-returns.361025/

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Anyone here can explain this Index IWM chart ? Weighting doesn't make sense to me

SunTrader

guru