There are a few ways to find out what stock indexes a company is included in and investors should take note of them when they are building their portfolios.
Knowing what indexes a company's stock is a part of can be very important part of predicting future movement. News that affects markets and sectors as a whole, will often move all the stocks within the index, regardless of whether or not the news was directly about the company.
There are several ETFs and mutual funds that are designed to track the major indexes, such as the the SPDR Dow Jones Industrial Average ETF (DIA) which tracks the Dow, and the PowerShares QQQ ETF (QQQ) which tracks the Nasdaq 100.
Determining the Index Components
Many websites provide information on what indexes a company may be a component of, however one of the easiest to use may be at Yahoo Finance.
- First, head to the Yahoo Finance quote page.
- Next, you can either type in the name or symbol of an index into the quote box (example: Dow Jones Industrial Average) or click one of the shortcut links in the markets bar.
- Once you are viewing the summary page of the selected index, click the link to "Components" where you will see the various stocks that are included in the particular index you are researching.
(Source: Yahoo Finance)
Another resource to use when looking for complete lists of index components is the web sites of the index maker. For example, you can find the list of stocks in the Nasdaq 100, by going to Nasdaq.com.
(Get to know the most important market indexes in Index Investing.)