As you become more financially sophisticated, you will find that many investment managers compare their performance to a various indexes. Here are a few of the most common stock indexes:
- The Standard & Poor’s 500 Index – The S & P 500 index,
The S & P 500 index consists of 500 stocks chosen on the basis of industry, market capitalization, liquidity and other factors.
- 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.
- The Russell 2000 Index,
This index consists of 2,000 small company stocks
- Wilshire 5000 Total Market Index (TMWX),
This index measures the stock performance of all US headquartered equities. includes equities of more than 7,000 companies
- The Nasdaq Composite Index,
The index consists of stocks of more than 5,000 companies traded on Nasdaq.