An index tracks the prices of a specifically selected group of securities to measure the performance of the financial market or market segment to which the securities belong. A financial market can be defined
in a variety of ways—by asset class, security size, risk level, geography, and a variety of other factors. For example, an index might track large-company US stocks, corporate bonds issued in developing markets, or global oil prices, to name just a few. An index can be broad—tracking hundreds or sometimes thousands of securities—or narrow—tracking only a few—or somewhere in between. But what each of an index’s components must have is a publicly available market price. Without a price, there can be no calculation. And if the price isn’t publicly available, there’s no way to be sure that the index is objective and therefore a reliable indicator of performance. As an index moves up or down to reflect gains or losses, the change is expressed both numerically and as a percentage. Percent change is generally considered a more revealing indication of what happened in the market during the time period being measured— seconds, hours, days, weeks, or longer. Percent change lets you compare the performance of different market   Read more…