Market Index

The Dow. The S&P 500. NASDAQ. FTSE. MSCI. They're all market indices.

Why do we even have these things? Well, we want to know, quantitatively, how well or poorly the market is doing. The indices get tracked and managed a bit. Like...if you're the index manager of the S&P 500, what do you do when AAPL buys one of the companies inside of that index? You have to replace that bought company with an equivalent value of an equivalent company, right? Well, how do you figure out where to look or what to put in its place?

Eh, you guess. You poke around. You look at trading volatility and industry sector and globalness, and think about the future in one form or another.

See: Index Funds. See: Exchange-Traded Funds.