What are Indexes?

Financial indices are aggregated (pooled together) statistical measures used to track the performance of a particular sector or market. An index is created by selecting a group of securities representing a particular market or industry and then measuring the overall performance of those securities over time. The value of an index is typically calculated using a weighted average of the prices of the securities included in the financial measure.

Investors use indices as a way to track the performance of a broader country or specific sectors, and to compare the performance of their own portfolios to the average performance of the index. This data can be used to provide a benchmark for the performance of a particular stock or investment, or to assess the performance of a particular market or sector.

For example, the S&P 500 index is a widely followed index in the United States that tracks the performance of the country's 500 largest publicly traded companies. By tracking the performance of the S&P 500, investors can get a sense of the overall health of the U.S. stock market.

What other stock indices are worth highlighting and writing in your trading journal?

Dow Jones Industrial Average (DJIA): tracks 30 large U.S. public companies and provides insight into the U.S. stock market

NASDAQ Composite: includes over 2,500 stocks, mostly U.S. technology and IT companies, listed on the NASDAQ exchange.

FTSE 100: tracks the 100 largest companies by market capitalization listed on the London Stock Exchange.

Nikkei 225: represents 225 blue-chip stocks on the Tokyo Stock Exchange and serves as a barometer of the Japanese stock market.

Moscow Interbank Currency Exchange (MICEX) is one of the largest universal exchanges in Russia, the CIS and Eastern Europe. It is among the top twenty trading platforms in the world by volume of transactions with securities and shares.

In summary, using indices can be useful for investors, as they allow them to track the economic performance of a country or specific sectors without the need to analyze individual stocks or investments. By investing in index funds or exchange-traded funds (ETFs) that are "tied" to specific indices, investors can gain the opportunity to earn passive income with minimal effort and expense.