It's a fund that contains many different stocks.
2007-04-04 06:43:10
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answer #1
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answered by the Boss 7
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Index is a collection of stocks. S&P500 consists of 500 stocks pulled together by Stds and Poors.
In recent years, mutual fund companies have created a trust by buying all 500 of those stocks with public funds, and then creating a stock (number of $ / number of shares), which they floated in the market.
Now, the entire S&P trades like a share or stock. So, when you buy 100 shares of SPY or QQQQ, you have a certain % of each of those shares in that index.
Finally, there must be at least 500 of them created in the US under an ETF or XTF. These are fun to play with, invest in, and have diversification built into it. It will not make you a millionaire overnight since it is not buying Walmart when it was 10c, and now after splits it is equiv to $300 (or whatever). But, it will not have the wild swings of Yahoo, Google, CMGI or Global Crossing (no more).
Good luck.
KKP
2007-04-05 11:41:01
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answer #2
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answered by KKP_Investor 3
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Instead of paying someone to pick stocks, index funds just buy and hold the stocks in a given market index (for example an S&P 500 would hold all 500 stocks in the S&P 500, a DJIA index fund would hold all the stocks in the DOW, etc).
Because you aren't paying people to select stocks, index funds had lower fees than actively managed funds and are better investments all other things being equal.
2007-04-04 14:02:54
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answer #3
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answered by Adam J 6
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A index fund, is a fund that tries to model or imitate something. A S&P index tries to model the S&P, a Dow Index tries to model the Dow, etc. These types of investments hope to just follow the market and have no expectation of beating or in most cases even matching what it is indexing. They hope to be almost as good.
2007-04-04 13:50:58
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answer #4
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answered by Anonymous
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As we have a measurement standard say meter for distance, so we have index in a stock exchange to measure its performance.
Its measured by how much points it has gone up or come down.
The Bombay stock index is known as sensex and comprises of 50 companies, similarly for S&P (Standard and Poor) there are 500 compinies.
2007-04-04 14:00:37
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answer #5
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answered by aquarianabhi 2
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