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The big three most commonly known are the Dow Jones Industrial Averages, S&P 500 and the Nasdaq Composite.
The S&P 500 is often used as the standard benchmark to judge performance of any specific security whether it being common stock or mutual funds. In other words, when reviewing a stock or mutual funds’ performance over a period of time, how did that security fare vs. the S&P 500 over the same period of time.
Two additional indices that you might wish to monitor are Russell 2000 and the Wilshire 5000. The Wilshire is the broadest indicator for the US equity market, with far more securities than the Dow which only represents 30 companies.
The Russell 2000 Index is a small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index. The Russell 2000 is by far the most common benchmark for mutual funds that identify themselves as “small-cap”, while the S&P 500 Index is used primarily for large capitalization stocks.
The Nasdaq Composite is a stock market index of the common stocks and similar securities listed on the NASDAQ stock market, meaning that it has over 3,000 components. It is highly followed in the U.S. as an indicator of the performance of stocks of technology companies and growth companies
I track on my website the four major indexes each and every week displaying the market trend from the previous week’s market close. In addition, I also track the VIX volatility market index also known as the market fear factor.
Daniel Iuculano, AAMS CMFC
Accredited Asset Management Specialist
Chartered Mutual Fund Counselor
