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Index

An index is a statistical measure that tracks the performance of a group of assets, such as stocks, bonds, or commodities. Indices are often used as benchmarks to evaluate the performance of investment portfolios or specific markets. Common examples include the S&P 500, which tracks the performance of 500 large U.S. companies, and the Dow Jones Industrial Average (DJIA). Indices help investors gauge market trends and compare the returns of their investments against the broader market.

Example

The S&P 500 index tracks the stock prices of 500 large companies in the U.S., providing a snapshot of the overall health of the U.S. stock market.

Key points

• A statistical measure that tracks the performance of a group of assets.

• Commonly used as benchmarks for evaluating market trends and portfolio performance.

• Examples include the S&P 500 and the Dow Jones Industrial Average (DJIA).

Quick Answers to Curious Questions

An index provides a benchmark for tracking the performance of a group of assets, helping investors understand market trends and compare returns.

Investors use indices to gauge market performance, set investment goals, and compare their portfolio’s performance against broader market trends.

Common examples include the S&P 500, Dow Jones Industrial Average (DJIA), and the NASDAQ Composite, each tracking different segments of the market.

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