Index Investing Tutorial
Index Investing - Introduction
The market is up, the market is down.... Stock market talk is everywhere, from TV and radio, to the paper and the Web. But what does it mean when people say, "The market turned in a great performance today?" What is "the market" anyway?
As it turns out, when most people talk about "the market," they are actually referring to an index. With the growing importance of the stock market in our society, the names of indexes such as the DJIA, S&P 500 and NASDAQ composite have become part of our everyday vocabulary.
This tutorial will define what an index is, discuss some of the major stock indexes, and explain how you can invest in the stock market using index funds.
Before investing in an index mutual fund or an exchange-traded fund (ETF), you should carefully consider information contained in the fund’s prospectus, including investment objectives, risks, charges, and fees. For ETFs purchased through ShareBuilder, you can review or request a prospectus via ShareBuilder’s ETF Center. Please read it carefully before investing.