Calculating the Return of Indices
Popular stock indices that can help us understand financial markets
Top US Market indices
– S&P 500
500 largest listed companies
Diverse constituency
Market-cap-weighted
True approximation of the US stock market
– Dow Jones Industrial Average
30 large public stocks
one of the historically oldest indices
equally weighted
NOT a true representation of the US stock market
– NASDAQ
Grouped securities
IT companies
Rate of return of tech stocks
Other countries
– FTSE (UK)
– DAX 30 (Germany)
– NIKKEI (Japan)
– Shanghai Stock Exchange (China)
Global indices
– MSCI
Includes stocks from all developed markets in the world.
