Senior Finances
Stock Indexes Can Help you Watch Your Money
News programs will frequently quote the Dow gained or lost so many points in a day. The Dow is a financial index that tracks the thirty largest companies in America. The Dow Jones Index is used as a way to measure stock market performance. When you hear news such as the Dow dropped 100 points today, keep in mind that when the index is hovering around 10,000 a 100 points up or down is hardly a blip on the map.
The Dow is one of the first indexes since it emerged in 1896, but it is not the only barometer of stock market performance. There is the NASDAQ, S&P 500, and Russell 2000 to help you gain a perspective on the day-to-day ups and downs of the market. These are all useful measurements as you watch your money in the stock market.
For investors, these are all tools used as indicators of market movement that are then factored in with other economic news and information available in your newspaper, financial publications, on the internet and from a stock broker.
It is important to watch you money and therefore it is useful to know what the different indexes really mean. Whether you follow a stock every day like clockwork or check in from time to time, the indexes are the measuring stick most investors use to tell how things are doing.