Investopedia

Continue to Site »

Composite Index

Filed Under » ,
Dictionary Says

Definition of 'Composite Index'

A grouping of equities, indexes or other factors combined in a standardized way, providing a useful statistical measure of overall market or sector performance over time.

Also known simply as a "composite".
Investopedia Says

Investopedia explains 'Composite Index'

Usually, a composite index has a large number of factors which are averaged together to form a product representative of an overall market or sector. For example, the Nasdaq Composite index is a market capitalization-weighted grouping of approximately 5,000 stocks listed on the Nasdaq market. These indexes are useful tools for measuring and tracking price level changes to an entire stock market or sector. Therefore, they provide a useful benchmark against which to measure an investor's portfolio. The goal of a well diversified portfolio is usually to outperform the main composite indexes.

Articles Of Interest

  1.

    An Introduction To Stock Market Indexes

    Be in the know - learn about the five most talked about indexes and what makes them all different.

  2. The ABCs Of Stock Indexes

    Indexes can track market trends, but they're not always reliable. Can you trust them?

  3. Index Investing

    Get to know the most important market indices and the pros and cons of investing in them.

  4. The NYSE And Nasdaq: How They Work

    Learn some of the important differences in the way these exchanges operate and the securities that trade on them.

  5. Are The NYSE Trading Floor's Days Numbered?

    The Intercontinental Exchange plans to buy the NYSE Euronextfor $8.2 billion. This article examines the implications of the potential sale.

  6. Has High Frequency Trading Ruined The Stock Market For The Rest Of Us?

    HFT is a controversial trading strategy. This article looks at how HFT affects the retail investor.

  7. What is a stock ticker?

    A stock ticker is a report of the price for certain securities, updated continuously throughout the trading session by the various stock exchanges. A "tick" is any change in price, whether that ...

  8. Stock Exchanges Around The World

    We tell you about five of the most popular stock exchanges from around the globe.

  9. Trading In The Pre- And Post-Market Sessions

    After-hours trading may have benefits for traders, but there are some potential problems.

  10. How are share prices set?

    When a company goes public though an initial public offering (IPO), an investment bank evaluates the company's current and projected performance and health to determine the value of the IPO for ...
comments powered by Disqus
Marketplace
Hot Definitions

  1. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  2. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  3. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  4. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  5. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  6. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
Trading Center