A numerical indicator that aggregates price or value data from a defined set of securities, assets, or economic variables—thereby transforming many moving parts into one easy‑to‑track figure. 1. Why Indices Exist To begin with, markets are awash with individual prices.…
A strategy that buys and holds a basket of securities designed to replicate a market index—thereby matching, rather than beating, the benchmark’s performance. 1. The Core Idea Instead of selecting individual “winners,” index investors purchase every constituent in a target…
Financial indices convert thousands of live prices into a single, continuously updated number. Understanding the math behind that headline figure clarifies why two benchmarks tracking the same market can behave so differently. 1. Start With a Universe First, an index…