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Funds & IndicesIndices

What an Index Is

A list that stands in for the whole market

When the news says the market rose today, which market? And why do ten companies count for over a third of it?

You'll find out

  • What the S&P 500 really is
  • Why some companies count far more
  • Why you can't buy an index itself

Why it matters

Most talk about "the market" means one number. Knowing how it's built tells you what it really measures.

About 3 min6 interactive slides · 5 questionsLesson 101 · Zone 12

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More in this zone

  1. 100FundsA Basket Instead of One EggA fund holds many investments at once
  2. 102IndicesThe Dow Started With 12Only one original member lasted into this century
  3. 103FundsActive and Passive FundsPicking stocks or buying the whole list
  4. 104FeesWhat 1% Costs Over a LifetimeA small fee can take a big slice of the result
  5. 105Active ManagementMost Pros Beat the MarketOver 15 years, most US stock funds trailed the S&P 500
  6. 106SimplicityBuffett's Million-Dollar BetA plain index fund beat a hand-picked set of hedge funds over ten years
  7. 107FundsETFs and Mutual FundsTwo wrappers for the same basket
  8. 108Investor BehaviorDoing Nothing Is HardPeople who traded the most earned the least