Stock Market Index

Why are there so many different Indices? What do they mean? What do they measure and why should I know about them?

An Index basically measures the performance of the active companies listed under it. At the same time, not all companies are equal and not all stocks are under one industry. In general, different Indices exist to measure performance of different stocks and companies that are of the same nature and perhaps size. This makes it easier for people to monitor the performance of the stocks they’re interested in, as opposed to having just one gargantuan index that measures everything… including the ones that may not be relevant to your needs.

This section will cover the Popular Indices and explain how each Index works, what they measure and their respective strengths and weaknesses, if any. The more you understand the different Indices, the easier it will be for you to start playing the stock market.