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.There are a couple of ideas to keep in mind when analyzing indices.First, the percentage moveis often more meaningful than the move in points.It means a lot more when the DJIA moves 50points if it is at 1,000 than if it is at 10,000.Second, while individual stock prices, at least for thetime being, are generally expressed as fractions, indices are displayed in decimals.Dow Jones Industrial AverageOne of the best-known market indicators, the Dow Jones Industrial Average, is comprised of 30leading companies.Calculated by adding the prices of these 30 stocks, the Dow is nowconsidered a figure that indicates the general state of the market.Originally, the Dow divided thesum of the prices of the 30 stocks by 30, giving a true average.However, to be consistent everytime a stock split or paid a dividend, the number 30 had to be adjusted.Now, over 100 yearslater, the sum of the prices of the 30 stocks is divided by a number less than one! Since a $1movement in the price of a $100 stock counts equally with a $1 movement in the price of a $20stock, the Dow Jones is considered a price weighted index.Dow Jones Chart 9/13/99 1:37 PMLast: 11,033.49Change: +5.06Open: 11,027.40High: 11,042.36Low: 10,982.20 Volume: 35,816,500Percent Change: +0.05%Yield: 1.58%P/E Ratio: 27.9952 Week Range: 7,399.38 to 11,428.94Charles Dow designed the average to represent the current business market, which in 1896included industries such as sugar, leather, tobacco, gas, rubber and coal.Today the DJIA is ledby retailers, oil, technology, pharmaceutical and entertainment companies.The only company onthe original list that is still included today is General Electric.S & P 500 IndexCreated in the 1920s by the Standard and Poor's Corporation (S & P), this index tracks 500companies in leading industries: transportation, utilities, financial services, technology, healthcare, energy, communications, services, capital goods, basic materials, consumer products,cyclicals and more.Many consider it the most accurate reflection of the U.S.stock market today.This high regard has led many money managers and pension plan administrators to use it as abenchmark for judging the overall performance of their fund against the stock market.Since the calculation for this index equals the price of each stock multiplied by the number ofshares held by the public, the companies with the most shares make the greatest impact.This isknown as a market weighted index.Nasdaq IndexThis index tracks the stocks on the National Association of Securities Dealers AutomatedQuotation System (Nasdaq) stock market.Since many new companies elect to join the Nasdaq,the number of stocks on the Nasdaq has grown from 100 to more than 5,500 today.Because thisindex includes many companies in the technology sector where market trends change quickly,this index can be volatileAmeritrade Online Investor IndexThe Ameritrade Online Investor Index tracks the daily buying and selling activity of individualonline investors at Ameritrade, Inc.While most major market indices include the activity of institutions and mutual fund companies,the Online Investor Index is unique in that it helps you understand what individual investors aredoing in relation to the stock market.The Online Investor Index does not measure price changes or volume-other indices do that.Instead, the Index measures buyer participation as a behavioral indicator related to investorconfidence.To learn more about the Ameritrade Online Investor Index, visit our website at www.ameritradeindex.com [ Pobierz całość w formacie PDF ]