Index

RECENT NEWS
MarketWatch  3 hrs ago  Comment 
The Big 3 major market indexes may have swung sharply higher into Thursday's close, but market internals showed that most stocks fell on the day. The number of declining stocks exceeded the number of advancing stocks by a 1,542-to-1,476 margin on...
Mondo Visione  Jun 14  Comment 
Chicago Board Options Exchange® (CBOE®) announced today that it has entered into an exclusive licensing agreement with Social Market Analytics (SMA) to develop a series of sentiment-based strategy benchmark indexes based on SMA’s social media...
Clusterstock  Jun 13  Comment 
The FTSE100 has new competition.  Bats Global Markets, the exchange operator and trading specialist, is launching a series of UK-focused benchmark indices. There will be 18 different indices in total, covering large and small cap...
The Hindu Business Line  Jun 11  Comment 
After recording a seven-month high, the indices have started falling. Be cautious
Mondo Visione  Jun 9  Comment 
In May, Moscow Exchange"s Indices reflected the negative trend on the Russian stock market. The MICEX Index was down 2.77% to 1,899.01 (from 1,953.05 on 29 April), while the dollar-denominated RTS Index fell 4.92% to 904.33 (from 951.11). More...
MarketWatch  Jun 8  Comment 
U.S. stock indexes' Wednesday advance ebbs
Mondo Visione  Jun 7  Comment 
Deutsche Börse is changing the rules for the composition of the MDAX, SDAX and TecDAX indices. As of September 2016, the process for selecting companies in the indices will be purely quantitative as well as completely automated, and aligned with...
Mondo Visione  Jun 6  Comment 
Warsaw Stock Exchange (GPW) announces changes in the constituents of the WIG20, mWIG40, sWIG80 and WIG30 indices following the June quarterly adjustment. The changes will be effective starting from 20 June 2016:   WIG20 and WIG30...
The Economic Times  Jun 5  Comment 
As part of the revision, the basket of items and weightage assigned to different entries on the basis of which indices is computed will be updated, he said.
MarketWatch  Jun 1  Comment 
A number of stock market indexes produced bullish technical patterns by closing above their April highs Wednesday, joining the Russell 2000 Index which accomplished the feat on Tuesday. What makes the higher closing highs bullish is that the Dow...




 
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An index, when used with respect to financial markets, is a statistical measure of change in a securities market. Indexes, or indices (both are correct in American English), are imaginary portfolios of securities (usually stocks) representing a particular market or a portion of it.

This is the chart for the Dow Jones Industrial Average. Scroll down for a list of major world indices on Wikinvest.



Generally, an index has three main purposes:

  • An Index shows the performance of a basket of equities instead of just a single equity - IE an index is diversified.
  • An index can show the performance of a particular class of assets - for example, a biotechnology index would show the performance of a diverse group of biotech companies over time.
  • An index can also be used to provide a generic securities category for passive management and derivatives (passive investing).

Each index is calculated using its own methodology, and its value is expressed in terms of a change from an original base value. So the numerical value of an index is not as significant as the percent change in the index.

Investing in indexes is a way to invest in the performance of a broad market sector, or in the market as a whole. But to trade an index, an investor must buy or sell through a third party. Stock and bond market indexes are used to make mutual funds and exchange-traded funds (ETFs) that mirror the performance of the index. Regardless of security type, indexing can cover broad categories such as a Total Market Index like (VTI), index investing can also be more micro and track sectors such as Small Cap Brazilian Companies (BRF).

When investing in an Exchange Traded Funds that tracks an index, an investor buys or sells an entire group of stocks when trading that particular ETF - an example is the StreetTRACKS Dow Jones Global Titans Index Fund (DGT). Some indexes allow investors to put money into commodities - an example is the PowerShares DB Commodity Index Tracking Fund (DBC) - while others, like the Baltic Dry Index (BDI), are important economic indicators used to measure the rates under which services are sold in a particular industry (in the case of the BDI, dry bulk shipping). Still others are forward looking, measuring the anticipated volatility of the markets - an example is the Nasdaq Volatility Index (VXN).

Major World Index on Wikinvest

There are many products available to investors to give them exposure to international indices. Mutual Funds and ETFs are the most widely held instruments which investors use to track markets around the world. Some examples of Major World Indices would be MSCI Emerging Market Index (EEM), MSCI EFAE Index (EFA), or Vanguard Emerging Markets (VWO). These are just a few examples of common securities offered to investors seeking exposure to an international world market index.

It is important to consider the currency risks of investing in many international index funds as well as the potentially higher costs associated with the transactions needed to operate the fund (trading, taxes, etc).


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