market index

Market Index

An aggregate value produced by combining several stocks or other investment vehicles together and expressing their total value against a base value from a specific date. Market indexes are intended to represent an entire stock market and thus track the market's changes over time.

Notes:

Index values are useful for investors to track changes in market values over long periods of time. For example, the widely used Standard and Poor's 500 Index is computed by combining 500 large-cap U.S. stocks together into one index value. Investors can track changes in the index's value over time and use it as a benchmark to compare their own portfolio returns to.

See also: Benchmark, Composite Index, Index, Index Arbitrage, Index Fund, Portfolio, Standard and Poor's 500 Index - S&P 500, Weighted Average Market Capitalization

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Market index

Market measure that consists of weighted values of the components that make up certain list of companies. A stock market tracks the performance of certain stocks by weighting them according to their prices and the number of outstanding shares by a particular formula.

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market index

See averages.