Index

A stock index measures the performance of a defined basket of stocks. It serves as a benchmark: how did the overall market or a sector perform? Well-known indices: S&P 500 (US), Nasdaq 100 (US tech), DAX (Germany), MSCI World (~1500 firms globally). Indices are usually weighted by market cap — bigger firms count more. You don't invest in an index directly; you buy an ETF or fund that tracks it.