Index Investing: Other Indexes
We've covered most of the big U.S. indexes, but we've barely scratched the surface of all the other indexes in the world. There are literally thousands of indexes tracking nearly any market. Remember, this tutorial has mostly focused on the overall market, but "market" can also refer to industry sectors or regions around the world.
Every major country has an index that represents its stock exchange. Here are some of the more important indexes around the world:
- FTSE 100 - United Kingdom
- Hang Seng - Hong Kong
- Nikkei - Japan
- DAX - Germany
- S&P/TSX Composite Index - Canada
- CAC 40 - France
Nasdaq has indexes broken down into the following categories: industrial, transportation, bank, telecommunications, insurance, computer, biotechnology and the Dow Jones industry indexes are seemingly unlimited. In fact, they maintain over 3,600 indexes overall, which you can check out at Dow Jones Indexes.
Some publications have become quite renowned for their specialty indexes. The best known example is probably the "Fortune 500" by Fortune Magazine. It ranks the biggest U.S. companies by sales. Another notable index comes from Value Line, an independent research firm whose research has done extremely well over the long run.
Choose the Correct Benchmark
One last point about indexes: even if you don't invest in them, it is important that you use the correct index against which to compare the performance of your portfolio. For example, if you own a mutual fund that invests in the Asian market it would be useless to compare its performance against an index tracking the semiconductor industry.
Index Investing: Index Funds
An index fund is a type of mutual fund with a portfolio constructed ...
A form of passive investing that aims to generate the same rate ...
An index designed to reflect the movement of the entire market. ...
A market-capitalization-weighted index maintained by Dow Jones ...
A statistical measure of change in an economy or a securities ...
A market capitalization-weighted index of 50 of the largest multinational ...
First, let's review the definition of an index. An index is essentially an imaginary portfolio of securities representing ... Read Answer >>
Stock indexes are formed based on the kinds of stocks or financial securities they want to track. For example, the Standard ... Read Answer >>
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 >>
Learn about the advantages and disadvantages of using the S&P 500 as a benchmark for portfolio performance, and understand ... Read Answer >>
Explore some of the major benchmark equity indexes worldwide that analysts and investors use to track the performance of ... Read Answer >>
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 >>