Every market has its index. While the DAX is representing major German companies trading on the primary stock exchange as well as its US equivalent, the Dow Jones, there is also an index for vintage cars. For old stocks and bonds the Historic Stocks Market Index HSTM is available. It reflects the price development of 100 representative Scripophily items.
The Index should be a good representation of what Scripophily worldwide has to offer, be it because of its visual attractiveness and/or its historic importance. This is compounded by the goal to appeal to a maximum of people, in particular those still outside Scripophily.
This implies that overall the index components should be as diverse as possible in terms of geography and industry sectors and the individual stocks and bonds should be able to create a certain excitement to collectors as well as newcomers because of their appearance and/or story. Furthermore, there should be a good resemblance to the current Scripophily market as, after all, the index should be a mirror of the market as a whole.
Because of technical reasons, each HSTM index component should be sufficiently often traded. In practice: every certificate should be traded at least every two years, except for the top scarce items where once every five years should be an absolute minimum.
Trading is, of course, only possible if a certain number of pieces are known. On the other hand, selected stocks and bonds should not be too common. Therefore index components usually have a rarity of R8 or R7 (between 11 and 50 available), with the exception of a small percentage of rarer top items as well as more common items.
Finally, as this Historic Stocks Market Index was launched in 2016, a historic track record was necessary to be calculated at least from 2013 onwards. Thus, the initial value is the last price before 1 January 2013.
In order to comply with all the above, a total number of 100 bonds and shares seemed to be the most suitable size for the HSTM.
The objective of this index is to describe facts as precisely as possible, but uncomplicated too. This includes certain assumptions and the definition of rules.
Sometimes condition has a very important influence on prices being higher or lower. Unfortunately, there is no objective proportionality, why papers with divergent condition are equally recorded and weighted. This might lead to short-term distortions, but in the medium to long-term these effects should balance each other out.
If prices should have a sufficient relevance, the relating offer definitely should have a minimum range to potential customers or should be made to a significant customer base. In order to take this into account, the index calculation only includes more frequently attended public auctions, but no mail bid auctions or private sales.
All prices used for calculation are net prices without commissions, fees or taxes. If an index component was traded more than once within a half-year period, an average price of all corresponding sales will be considered for this period.