What exactly is an index fund? - index of /young girls/jpg
Someone please explain to me in words what an index fund is more or less simple? I'm young, but just try to understand the investment firms. Thank you to all the answers.
Wednesday, January 27, 2010
Index Of /young Girls/jpg What Exactly Is An Index Fund?
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In its simplest form makes an index fund is a fund, the same proportions of the various population groups as an important clue. In other words, the fund collects money from buyers of stocks for the fund. The fund is that money and buy stocks that are in the S & P 500 (Index, or whatever subject) in the same proportion in the real index.
Why would I do that? Because they buy enough money to all the individual titles in the same proportion as the shares purchased only one index fund, and gives me the benefits that you spend the index without $ $ s. Although an index that is consistent, that I think are good, I can do a study, I can only buy shares in the index and index fund managers "to make all the calculations in respect of the reserves remain part of the index.
Below you will find a detailed description of the S & P 500, a clearer idea of how they are clues.
Hope this helps
Pete
DEFINITION S & P 500, INDIAX:
An index of 500 shares for the market size, liquidity and industry association, selected among other factors. The S & P 500 is designed to be an important indicator of the U.S. Securities and has been designed to reflect the risk / return of large-cap universe.
Companies that are in the index of the S & P Index Committee, a team of analysts and economists selected by Standard & Poor's. The S & P 500 Index is weighted by market capitalization - the weight of each stock in the index in proportion to its market value.
The S & P 500 is one of the most widely used benchmarks for the U.S. market in general. The Dow Jones Industrial Average (DJIA) was at once the most popular stock index for U.S., but because the DJIA contains only 30 companies, most people agree that the S & P 500 is a better representation of the U.S. market. In fact, many consider it the definition of the market.
Other popular indexes from Standard & Poor's, the S & P 600, an index of small capitalization companies whose market capitalizationfrom $ 300 million and $ 2 billion, and the S & P 400, an index of medium market capitalization companies with a market capitalization of 2 billion to $ 10 billion.
In its simplest form makes an index fund is a fund, the same proportions of the various population groups as an important clue. In other words, the fund collects money from buyers of stocks for the fund. The fund is that money and buy stocks that are in the S & P 500 (Index, or whatever subject) in the same proportion in the real index.
Why would I do that? Because they buy enough money to all the individual titles in the same proportion as the shares purchased only one index fund, and gives me the benefits that you spend the index without $ $ s. Although an index that is consistent, that I think are good, I can do a study, I can only buy shares in the index and index fund managers "to make all the calculations in respect of the reserves remain part of the index.
Below you will find a detailed description of the S & P 500, a clearer idea of how they are clues.
Hope this helps
Pete
DEFINITION S & P 500, INDIAX:
An index of 500 shares for the market size, liquidity and industry association, selected among other factors. The S & P 500 is designed to be an important indicator of the U.S. Securities and has been designed to reflect the risk / return of large-cap universe.
Companies that are in the index of the S & P Index Committee, a team of analysts and economists selected by Standard & Poor's. The S & P 500 Index is weighted by market capitalization - the weight of each stock in the index in proportion to its market value.
The S & P 500 is one of the most widely used benchmarks for the U.S. market in general. The Dow Jones Industrial Average (DJIA) was at once the most popular stock index for U.S., but because the DJIA contains only 30 companies, most people agree that the S & P 500 is a better representation of the U.S. market. In fact, many consider it the definition of the market.
Other popular indexes from Standard & Poor's, the S & P 600, an index of small capitalization companies whose market capitalizationfrom $ 300 million and $ 2 billion, and the S & P 400, an index of medium market capitalization companies with a market capitalization of 2 billion to $ 10 billion.
http://www.sec.gov/answers/indexf.htm
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