How is the index calculated?
The Individual Investor Index (i3) is a unique index that approximates the returns of the average US-focused DIY investor. Calculations are based on multiple data sources including the International Securities Exchange Sentiment Index, Commitment of Traders and odd-lot sales and purchases. Rather than combine sentiment measures that suggest how investors are feeling, the i3 attempts to demonstrate what investors are doing. The i3 will always be in a state of refinement as we discover new and better ways to approximate the actions of retail traders.
How accurate is it?
Completely arbitrary, the i3 is more entertainment than science. However, we feel it is more realistic than most industry benchmarks which do not accurately represent the average investor’s returns.