Index Investing
  1. Index Investing: Introduction
  2. Index Investing: What Is An Index?
  3. Index Investing: The Dow Jones Industrial Average
  4. Index Investing: The Standard & Poor's 500 Index
  5. Index Investing: The Nasdaq Composite Index
  6. Index Investing: The Wilshire 5000 Total Market Index
  7. Index Investing: The Russell 2000 Index
  8. Index Investing: Other Indexes
  9. Index Investing: Index Funds
  10. Index Investing: Conclusion

Index Investing: Introduction


Stock market talk is everywhere, from TV and radio, to the newspapers and the web. But what does it mean when people say that "the market turned in a great performance today?" What is "the market" anyway?

As it turns out, when most people talk about "the market," they are actually referring to an index. With the growing importance of the stock market in our society, the names of indexes such as the Dow Jones Industrial Average (DJIA), S&P 500 and Nasdaq composite have become part of our everyday vocabulary.

This tutorial will define what an index is, discuss some of the major stock indexes and explain how you can invest in the stock market using index funds.

(If you aren't familiar with the stock market and mutual funds, we suggest that you check out our Stock Basics Tutorial and Mutual Fund Basics Tutorial before reading on.)

Index Investing: What Is An Index?

  1. Index Investing: Introduction
  2. Index Investing: What Is An Index?
  3. Index Investing: The Dow Jones Industrial Average
  4. Index Investing: The Standard & Poor's 500 Index
  5. Index Investing: The Nasdaq Composite Index
  6. Index Investing: The Wilshire 5000 Total Market Index
  7. Index Investing: The Russell 2000 Index
  8. Index Investing: Other Indexes
  9. Index Investing: Index Funds
  10. Index Investing: Conclusion
RELATED TERMS
  1. Index Fund

    An index fund is a type of mutual fund with a portfolio constructed ...
  2. Index Investing

    A form of passive investing that aims to generate the same rate ...
  3. Standard & Poor's 500 Index - S&P 500

    An index of 500 stocks chosen for market size, liquidity and ...
  4. Tracker Fund

    An index fund that tracks a broad market index or a segment thereof. ...
  5. Dow Jones U.S. Market Index

    A market-capitalization-weighted index maintained by Dow Jones ...
  6. Broad-Based Index

    An index designed to reflect the movement of the entire market. ...
RELATED FAQS
  1. Is it possible to invest in an index?

    First, let's review the definition of an index. An index is essentially an imaginary portfolio of securities representing ... Read Answer >>
  2. What is the difference between the Dow and the Nasdaq?

    Because of the way people throw around the words "Dow" and "Nasdaq," both terms have become synonymous with "the market," ... Read Answer >>
  3. How can I find out if a company I like is included in an index?

    There are a few ways to find out what indexes a company is involved in, and investors should take note of them when they ... Read Answer >>
  4. How does a point change in a major index effect its equivalent exchange-traded fund?

    The S&P 500 and Dow Jones Industrial Index (DJIA) are two of the most well-known indexes tracking the movement of the ... Read Answer >>
  5. How do indexes determine which stocks are removed or added to them?

    Stock indexes are formed based on the kinds of stocks or financial securities they want to track. For example, the Standard ... Read Answer >>
  6. Why can you short sell an ETF but not an index fund?

    To answer this question, we should first define exactly what an index fund is. An index fund is a mutual fund, or a basket ... Read Answer >>
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