Knowing Major Stock Indexes (Part I)
There are 100s of Exchange Traded Funds (ETFs) and HOLDRS covering key industry benchmarks such as the various Standard & Poor (S&P) Indexes, Russell Indexes or the Dow Jones Products. There are other ETFs that cover the other less well known narrow based sectors.
You should know the major indexes that are either key benchmarks or have ETFs tied to them. For example SPY tracks the Standard & Poors 500 Composite Index and is the largest of the ETFs.
Standard & Poor: Standard & Poor (S&P) is the financial services segment of the McGraw Hill companies and has been providing independent and objective financial information, analysis and research for nearly 140 years.
It is also the provider of equity indexes. Investors around the globe use S&P Indexes for investment performance measurement. These indexes are also used as the basis for wide variety of financial instruments such as Index Funds, Futures, Options and ETFs.
S&P 500 Composite is one of the most popular indexes in the global financial markets. Hundreds of companies around the world have licenses with the Standards & Poors for their index products and the influence and name recognition of S&P 500 is unparalleled. S&P 500 is also used as a key benchmark for money manager performance.
The S&P 500 is a capitalization weighted index that tracks the performance of 500 large capitalization issues. S&P 500 represents more than 75% of the capitalization of the entire US Stock Market. Each year thousands of money managers have the single minded goal of outperforming the S&P 500.
Over the years, the complexion of S&P 500 has changed. 30 years back most of the stocks were from the Industrial Sector. By 1970s, six of the top companies were from the Oil Sector. In 2000s, technology composed about one third of the capitalization of the index. The stocks in the S&P 500 are determined by a nine member committee in accordance with the general guidelines.
The other Standard & Poors indexes are the S&P Midcap 400 Index and it is based on 400 chosen domestic stocks. It is also capitalization based and measures the performance of the midsize companies of the US economy.
The S&P SmallCap 600 Index consists of 600 domestic stocks chosen for market size and liquidity. It is also capitalization weighted and is of interest to institutional and retail investors. There are also sub-indexes based on these S&P Indexes.
NASDAQ: You will often hear in the media that the Nasdaq market being up or down on a given day. NASDAQ Composite Index contains more than 4500+ companies. It represents a market capitalization of trillions of dollars in the US economy.
There is another Nasdaq Index called the Nasdaq-100. It is composed of the top 100 nonfinancial companies in the Nasdaq Stock Market. The QQQ is based on the Nasdaq-100 Index. NASDAQ-100 is a modified capitalization weighted index. - 23212
You should know the major indexes that are either key benchmarks or have ETFs tied to them. For example SPY tracks the Standard & Poors 500 Composite Index and is the largest of the ETFs.
Standard & Poor: Standard & Poor (S&P) is the financial services segment of the McGraw Hill companies and has been providing independent and objective financial information, analysis and research for nearly 140 years.
It is also the provider of equity indexes. Investors around the globe use S&P Indexes for investment performance measurement. These indexes are also used as the basis for wide variety of financial instruments such as Index Funds, Futures, Options and ETFs.
S&P 500 Composite is one of the most popular indexes in the global financial markets. Hundreds of companies around the world have licenses with the Standards & Poors for their index products and the influence and name recognition of S&P 500 is unparalleled. S&P 500 is also used as a key benchmark for money manager performance.
The S&P 500 is a capitalization weighted index that tracks the performance of 500 large capitalization issues. S&P 500 represents more than 75% of the capitalization of the entire US Stock Market. Each year thousands of money managers have the single minded goal of outperforming the S&P 500.
Over the years, the complexion of S&P 500 has changed. 30 years back most of the stocks were from the Industrial Sector. By 1970s, six of the top companies were from the Oil Sector. In 2000s, technology composed about one third of the capitalization of the index. The stocks in the S&P 500 are determined by a nine member committee in accordance with the general guidelines.
The other Standard & Poors indexes are the S&P Midcap 400 Index and it is based on 400 chosen domestic stocks. It is also capitalization based and measures the performance of the midsize companies of the US economy.
The S&P SmallCap 600 Index consists of 600 domestic stocks chosen for market size and liquidity. It is also capitalization weighted and is of interest to institutional and retail investors. There are also sub-indexes based on these S&P Indexes.
NASDAQ: You will often hear in the media that the Nasdaq market being up or down on a given day. NASDAQ Composite Index contains more than 4500+ companies. It represents a market capitalization of trillions of dollars in the US economy.
There is another Nasdaq Index called the Nasdaq-100. It is composed of the top 100 nonfinancial companies in the Nasdaq Stock Market. The QQQ is based on the Nasdaq-100 Index. NASDAQ-100 is a modified capitalization weighted index. - 23212
About the Author:
Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and forex. Know Candlestick Charting. Learn Forex Trading!
posted by X - Men @ 1:57 AM
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