DISCOVER THE WORLD
OF INDICES TRADING

S&P500, Nasdaq 100, FTSE100, Nikkei 225…

Do these sound familiar to you?

Indices are an important part of investors’ lives, so buckle up and let’s discover the world of indices.

First things first. An index is a collection of assets that represent a particular market or sector.

By investing in an index, you can gain exposure to a broad range of stocks and bonds without having to buy them individually.

Indices also help tremendously to diversify your portfolio. 

By investing in one, you can actually spread your investment across a large number of stocks or bonds, reducing the risk that a single investment would have on your portfolio.

This can help to balance out the ups and downs of the market, and can potentially provide a more stable return over time.

Another advantage of indices is that they are low cost. 

Index funds are typically cheaper than actively managed funds, as they don’t require a lot of research and analysis from the trader side. They’re also made by companies which charge relatively low annual fees.

For many investors, indices are often used as a benchmark for the overall stock market, making them a useful tool for tracking the performance of their portfolios.

The S&P 500 is an example of such a benchmark, as many investors compare their portfolios’ performance to it in order to make informed decisions about their next actions.

The S&P 500 is comprised of 500 of the largest US companies. With almost half of these companies’ revenue coming from abroad, and the selection being diversified across multiple types of sectors, many investors consider the S&P 500 as a barometer for the economy as a whole.

Another index commonly used as a barometer, but specifically for the technology market, is the Nasdaq 100.

This index comprises the top 100 US tech companies so when analysing a specific tech stock, using the Nasdaq 100 as a benchmark can be beneficial.

Other investors may choose to diversify with exposure to other countries. For example, if some believe that the Japanese market will outperform the global one, they may choose to invest in the Nikkei 225 Index. 

Others who believe in the French economy may choose to invest in the CAC40, and so on.

So, if you’re looking for assets that are convenient, cost-effective, that will give you great exposure to the market and keep your portfolio diversified — indices may be the assets for you.

Thanks for watching, and see you in the next video!