Understanding Stock Market Indexes

A stock market index is a statistical measure of changes in the securities markets. An index represents a portfolio of securities traded on the market that is considered to be reasonably representative of the market as a whole. Each index has its own method of calculation. It is generally expressed as a change from its base value. For a better understanding of the stock market, an index should be read not at its absolute numerical value but at the percentage change in its numerical value. One cannot invest in an index directly. However, you can invest in index related mutual funds.

Popular indexes in the US

The Standard & Poor's 500 Index ? The S & P 500 index

This index is the most popular index in the world. The S & P 500 index consists of 500 stocks chosen on the basis of industry, market capitalization, liquidity and other factors. It is a leading indicator of US stocks. The index does not include speculative stocks.

The Dow Jones Industrial Average (DJIA) ? popularly known as the Dow

This index consists of 30 significant stocks traded on the New York Stock Exchange (NYSE) and the NASDAQ. It includes companies such as Microsoft, Exxon Mobil, Disney, and General Electrical. The index does not include speculative stocks.

The Dow Jones Utility Average (DJUA)

The DJUA is more of a sector based index as it is a price-weighted average of 15 utility stocks traded in the US. It is sensitive to interest rate changes as utility companies tend to borrow a great deal of money.

The Russell 2000 Index

This index consists of 2,000 small company stocks that are included in the Russell 3000 index. It serves as a bench mark for small company stocks in the US.

Wilshire 5000 Total Market Index (TMWX)

This index measures the stock performance of all US headquartered equities for which price data is readily available. It is one of the broadest stock market indices. It includes equities of more than 7,000 companies traded on US Stock Exchanges.

The Nasdaq Composite Index

It tracks companies traded on the Nasdaq Stock Exchanges. The index consists of stocks of more than 5,000 companies traded on Nasdaq. Most of these companies are technology companies. However, you will find companies in the financial, industrial, transportation and insurance sectors. It also consists of many speculative companies.

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In The News:

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Why you should invest in multi cap mutual funds  Economic TimesMany advisors are recommending multi cap funds in the current environment to investors. This scheme which bundles large-, mid- and small cap stocks is often ...
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Top 5 funds, managing Rs 12.53 lakh crore, shopped for these stocks in August  Moneycontrol.comInox Fluorochemicals, Sterling and Willson, Somany Home Innovation, JSW Holdings and Adani Enterprises among the top picks.
Is time to say goodbye to small cap mutual funds?  Economic TimesAs per Sebi re-categorisation norms, small cap mutual funds are mandated to invest at least 65 per cent of their corpus in small cap stocks.
Slowdown shock: PPF beats mutual funds over 5 years  LivemintThe economic slowdown, which has been gathering pace since the start of 2018, has now come to bite mutual fund returns. Key equity mutual fund categories ...
Best small and mid cap mutual fund managers 2019  Economic TimesHere are the top 5 fund managers in the small and mid cap category who have created the most wealth for investors.
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Top 30 stocks that fund managers bought & sold in July; do you own any?  MoneycontrolMutual funds net bought Rs 14,846.75 crore worth of shares last month. Their inflows into equity funds also improved to Rs 8,113 crore in July, rising nearly 6 ...
Hidden tech gems to invest in now, picked by a mutual-fund manager with a great track record  MarketWatchYou don't have to own the big tech stocks to make decent profits. Here are six lesser-known gems that are ready to take advantage of coming trends in tech.
Rise in mutual fund inflows through SIPs is a good sign: Aditya Agarwal, MD, Morningstar India  Economic TimesAditya Agarwal, Managing Director, Morningstar India, discusses the key knowns and unknowns of the mutual fund sector and the potential of returns it offers ...
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Waiting for market revival? SIPs in these 12 stocks can deliver big  Economic TimesSIP in equities can help reduce the risk of timing the market by averaging out benefits.
Index Funds Are the New Kings of Wall Street  The Wall Street JournalMoney managers that mimic the stock market just became the new titans of the fund-management world. Funds that track broad U.S. equity indexes hit $4.27 ...
We want to be among the top 10 mutual funds in the country in the next decade: ITI Asset Management CEO  BusinessLineITI Asset Management is unperturbed by its late entry into the mutual fund market. As any new comer, they are confident that the under-penetrated Indian market ...
Mutual Fund Update: Stocks sold by fund managers in July 2019  Dalal Street Investment JournalIn our last update we listed the top 5 stocks that attracted fund managers in the month of July 2019. Now let's have a look at top 5 stocks that witnessed a lot of ...
When equity mutual funds offer negative returns, here’s what you do  Economic TimesThe need of the hour is to stay insulated from the panic in the market.
Top stocks mutual funds bought and sold in August 2019  CNBCTV18Domestic mutual funds remained net buyers for a fourth straight month, resulting in an overall inflow of Rs 1.02 lakh crore in August, much higher than Rs 87000 ...
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From SBI MF to Aditya Birla Sun Life MF, top mutual funds bulk up on cash  Business StandardFive of the top 10 mutual funds by equity value are holding cash in the range of 8-11 per cent, a reasonably high number. Equity funds typically hold cash ...
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Stock Pickers Are Just Imagining an Index Bubble  BloombergQuint(Bloomberg Opinion) -- Spoiler alert: Index funds are no bubble. It's not terribly surprising that active managers loathe index funds. It can't be pleasant to watch ...
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These two key portfolio diversification strategies can help you buffer stock market risk  MarketWatchStories resonating with MarketWatch readers this past week.
How much money can I make in mutual funds?  Business Insider IndiaA large number of investors are investing in mutual funds to grow their money. As is the case with any investment instrument, your money can yield very high.
Sebi allows mutual funds to tie up with banks to rejig exposure  Economic TimesMumbai: Mutual Fund (MF) houses can now join hands with banks to rejig exposure and throw lifeline to stressed corporates --- albeit with a few conditions.
Bet on these 10 stocks for 12-22% returns by next Ganesh Chaturthi  MoneycontrolThe market hit a *fresh* record high this year, but gave negative return since the last Ganesh Chaturthi, with the Nifty50 falling 3 percent and Mid-Smallcap sinking ...
Sebi wants MFs to invest only in listed securities  Economic TimesSebi said it has also decided to give flexibility to MFs to invest in unlisted NCDs up to a maximum of 10% of the debt portfolio of the scheme.
Large-Cap Funds Dump Tech Stocks. Small-Cap Funds Are Overweight Them.  Barron'sInvestment funds focused on big companies cut their holdings of tech stocks last quarter, but their small-cap counterparts took a different approach. They held on ...
4 Mutual Funds to Tap the Growing Housing Market  Yahoo FinanceThe American housing market is growing at a decent pace courtesy of several factors such as record low mortgage rates and a solid domestic economy. As more ...
Is Vanguard PRIMECAP Fund Admiral (VPMAX) a Strong Mutual Fund Pick Right Now?  Yahoo FinanceIf you've been stuck searching for Large Cap Growth funds, you might want to consider passing on by Vanguard PRIMECAP Fund Admiral (VPMAX) as a ...
9 steps to protect your finances against recession in the economy  Economic TimesBad news is infectious. As reports of job losses, slowing demand and the liquidity crisis trickled in last week, the stock markets slipped. To be sure, the Nifty has ...
Nervous about stocks? Bill Gates isn’t  MarketWatchBill Gates told Bloomberg News that most of his assets are still invested in stocks.
Saurabh Mukherjea of Marcellus Investment is positive on these blue-chip stocks  Moneycontrol.comSaurabh Mukherjea, founder and chief investment officer at Marcellus Investment, spoke to CNBC-TV18 about the economic slowdown and how investors ...
Is Fidelity Value Fund (FDVLX) a Strong Mutual Fund Pick Right Now?  Yahoo FinanceLooking for a Global - Equity fund? You may want to consider Fidelity Value Fund (FDVLX) as a possible option. FDVLX holds a Zacks Mutual Fund Rank of 3 ...
CNBCTV18 Market Highlights: Sensex, Nifty settle with gains led by metal, IT shares, Tata Steel jumps 4%  CNBCTV18Market Highlights: Indian shares ended Wednesday's trade on a positive note as falling crude oil prices eased inflationary and trade deficit concerns. Metals IT ...
Vanguard Roth IRA: Is It the Best Roth for You?  NerdWalletWith a Vanguard Roth IRA you'll find some of the lowest-cost mutual funds around. But Vanguard's other costs and mutual-fund minimums are a disadvantage.
S&P 500 Growth Fan? Check Out These Big Value Stocks  Investor's Business DailyInvestors are chasing value stocks. Value stocks can offer lower valuations and higher dividends. But where will the S&P 500 value leadership come from?
Good time to invest in India with a long-term view: Mark Mobius  Moneycontrol"India will continue to grow in the long-term, but there is a lot of confusion w.r.t taxation," Mark Mobius, founder of Mobius Capital Partners LLP said in an ...
Momentum stock strategies are down — but not out  MarketWatchWhen will momentum regain the big mo? I am referring to investment strategies that favor top-performing stocks and avoid those at the bottom. According to the ...
Propping up Stock Market: Govt measures falling flat  The Daily StarThe government's recent measures to prop up the stock market appear to have failed as the unusual fall of share prices continues to rattle investors. Yesterday ...
GE Stock Bulls Say The Worst Is Over. A Prominent Bear Disagrees.  Barron'sAnalysts remain polarized about the prospects for General Electric. Wall Street target prices range from $5 to $15 a share, a remarkably wide spread.
Stocks in the news: HDFC, YES Bank, Gruh Finance, PNC Infratech, Hindalco and Adani Green  Economic TimesNEW DELHI: Nifty futures on the Singapore Exchange were trading 3.50 points, or 0.30 per cent, lower at 11,004.50, indicating a flat start for Dalal Street.
Is JPMorgan Large Cap Growth A (OLGAX) a Strong Mutual Fund Pick Right Now?  Yahoo FinanceOn the lookout for a Large Cap Growth fund? Starting with JPMorgan Large Cap Growth A (OLGAX) is one possibility. OLGAX carries a Zacks Mutual Fund Rank ...
Is Vanguard Institutional Index Plus (VIIIX) a Strong Mutual Fund Pick Right Now?  Yahoo FinanceIf you've been stuck searching for Index funds, consider Vanguard Institutional Index Plus (VIIIX) as a possibility. VIIIX has no Zacks Mutual Fund Rank, but we ...
Index Funds Have More Money Than Active Funds  MONEYIndexing just became the undisputed heavyweight champion of the stock market, and small investors should be cheering the victory. The amount of money in ...
Investors move back into U.S. stock funds on hopes for trade resolution  Midwest CommunicationBy David Randall NEW YORK (Reuters) - Investors ended a 3-week retreat from Wall Street last week by sending nearly $8.6 billion into mutual funds and ...
Mutual fund investors keep faith in stocks despite market rout  LivemintMumbai: Investors in Indian equity mutual funds bought more last month, unfazed by the selloff that saw the nation's $1.9 trillion market log its worst July in 17 ...
Auto ka time aayega? Experts positive about auto stocks despite alarming August sales numbers  MoneycontrolThe sales numbers are alarming and challenges for the sector are mounting. At first glance, it looks logical to stay away from auto stocks.
How to prepare for a recession  CNBCAre you prepared if a recession hits? Whether or not one is on the horizon, you should take some steps ahead of time to recession-proof your life. “Now is the ...
What India's biggest mutual funds bought and sold in July  LivemintInvestors in Indian equity mutual funds bought more last month, unfazed by the selloff that saw the nation's $1.9 trillion market log its worst July in 17 years.
4 Northern Mutual Funds for Spectacular Returns  Zacks.comBelow we focus on three top-ranked Northern mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy).
Goldman Sachs Finds 5 Top Stocks Mutual Funds Have Loaded Up On  24/7 Wall St.To say that mutual fund portfolio managers tend to follow the herd is an incredible understatement, and it always has been. While publicly they sometimes seem ...
As recession fears loom, is India better equipped than 2008?  MoneycontrolMarkets usually bottom out before the economy does and considering that India is one of the fastest-growing economies, markets will bounce back quickly.
Is it time to stop investing in equity mutual fund schemes?  Economic TimesIt is difficult to predict the market but many pundits feel it clearly needs some firm signal from the govt.
MF shopping list: Top 30 stocks that fund managers bought & sold in June  MoneycontrolMutual funds increased allocation to private banks, consumer, utilities, technology, NBFCs, retail, metals and PSU bank stocks in June, an ICICIdirect report said.
Top 10 stocks that mutual fund managers bought and sold in March 2019  Moneycontrol.comData for equity flows into mutual funds for March came as a breather after a weak February. An increase in net inflows in equity and income category led to the ...
Why picking the right mutual fund is key in a tough market  LivemintWhy have mutual fund (MF) returns fallen? Mutual funds primarily invest in equity (stocks) or debt (bonds). On the equity side, mid and small cap MFs have given ...
Invest in reliable outperforming mutual funds: Here are 8 of these  Economic TimesThese funds tend to score well on risk-adjusted metrics and hold dependable stocks in their portfolios.
Should you invest in international mutual funds?  LivemintIf you were to sort all equity mutual funds available for retail investment by their one-year performance, international funds would come on top. The best ...
What India's three largest mutual funds bought and sold in June  Economic TimesHeres what the top three asset managers bought and sold last month.
Consider investing in direct stocks only if you can monitor portfolio proactively  LivemintDirect stocks can be considered if you have the ability to do research to identify the stocks to be bought as well as to be sold.You should be revisiting your ...
Mutual funds’ exposure to this space at all-time high; should you buy?  Economic TimesMoney managers on Dalal Street continued to shower affection on private banks for the ninth successive month as their exposure hit 19.90 per cent in June, ...
What India's top three mutual funds bought and sold in March  Economic TimesIndias largest money manager held 1.5 trillion rupees in equities.
Sensex's rise from 20K to 40K: 5 lessons for equity mutual fund investors  Economic TimesWe look at some critical lessons that equity fund investors learnt during the journey of Sensex reaching 40K.
Flows into mutual funds revive in May as Modi win seems to spur risk demand  LivemintFlows into Indian equity mutual funds in May rebounded from the smallest in 31 months as Prime Minister Narendra Modi's comfortable electoral win spurred ...
Mutual fund investors showing great appetite for assuming risk: Dhirendra Kumar  Economic TimesOne would have thought that new investors who came into mutual funds will be running away. But they are getting into riskier category of funds and the scale of ...
Here are a few mutual funds that stocked up on YES Bank in Q4FY19  Business StandardShares of YES Bank tanked 30 per cent in trade on Tuesday, after the bank reported a massive Rs 1,507 crore loss in the fourth quarter of financial year 2018-19 ...
Actively-managed large cap mutual funds poised for a comeback  Economic TimesDefying predictions of their imminent irrelevance, some actively-managed large cap mutual fund schemes have bounced back to the top of the return chart.
Diversify your portfolio by investing a portion in US-focused mutual funds  MoneycontrolDeveloped markets such as US have delivered significant returns over market cycles.
A mutual fund for daughter’s education  Economic TimesIf you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.
What India's top three mutual funds bought and sold in May  LivemintInflows into Indian equity mutual funds in May rebounded from the smallest in 31 months as Prime Minister Narendra Modi's comfortable electoral win spurred ...
Value mutual funds have given good returns over long term but can underperform in short term  Economic TimesOver the years, the benefits of value investing have been espoused by several market gurus and fund managers. Discussions around this investing philosophy ...
6 bad money habits that investors should give up  Economic TimesSome habits can exact a heavy toll on your finances. We look at a few common ones that you should give up.
Mutual fund SIPs don't make equity investing risk-free. Here's why  Economic TimesSIPs do reduce the risk of market timing & allow investors to buy more units when their price falls.
A young investor’s guide to mutual funds  Economic TimesMany young investors, who are barely a year or two old in their career, are eager to start investing in mutual funds. ETMutualFunds.com receive many queries on ...

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