index stocks
index stocks questions and answers
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Q: Why japans stock index nikkie falling since 1990 contineously?
If compared with other world stock indices like dow jones, hang seng it is found that nikkie is falling every year. it came down from 38000 to 16000. I cant understand why this happened.
A: Actually, the Nikkei has NOT been "falling since 1990 continuously."
Let's look at the numbers for January in each of the years since 1984, when the Nikkei first appeared:
1984……10,196……
1985……11,993……17.6%
1986……13,024……8.6%
1987……20,048……53.9%
1988……23,622……17.8%
1989……31,581……33.7%
1990……37,189……17.8%
1991……23,293……-37.4%
1992……22,023……-5.5%
1993……17,024……-22.7%
1994……20,229……18.8%
1995……18,650……-7.8%
1996……20,813……11.6%
1997……18,330……-11.9%
1998……16,628……-9.3%
1999……14,499……-12.8%
2000……19,540……34.8%
2001……13,844……-29.2%
2002…… 9,998……-27.8%
2003…… 8,340……-16.6%
2004……10,784……29.3%
2005……11,388……5.6%
2006……16,650……46.2%
2007……17,383……4.4%
(From Source #1, below)
Look at the third column, which represents year-over-year growth. Note that between 1984 and 1990 -- period of five years -- the Nikkei almost quadrupled. Most people would probably call that a bubble. So the starting point of your comparison is the very high point of the Nikkei's history.
Since 1990, the Nikkei has fallen in 10 years and risen in 7 years, with the bubble bursting -- dropping by more than one-half -- between 1990 and 1993.
For an informative discussion of the Nikkei's gyration, see Source #2, below.
Q: What are the names and symbols of some "stocks" that mirror the major indexes as they drop (go short)?
I want to know what "stocks" take advantage of a drop in the various stock indexes. In the opposite way that "SPYDERS" (SPY) mirrors the S&P going higher and 'QQQ' mirrors the Nasdaq index.
What are the symbols for the S&P 500, Dow Jones Industrials and Nasdaq index that mirrors those indexes when they are dropping in price? I am not looking for "defensive" stocks, but those that actually go "short" the major stock indexes. I am also not interested in any mutual funds that negatively mirror stock indexes.
Thanks for your help.
.
.
A: SDS is the ProShares S&P 500 short ETF
QID is the one for the Nasdaq.
Google 'Proshares' and you'll find the rest of them. They have them for most major indices.
Q: How are stocks selected for the index ?
A: Which index? For the Dow Jones Industrial Average, industrial stocks used to make up the average but with the decline of industrial production in the U S Dow Jones has tended to replace industrial stocks with stocks that had more promise of making the average go up. AIG is now a major component, an insurance company. The average is continually tweeked by replacing stocks so as to improve its performance. For example, you will not find GM in the Dow Industrial Average any more.
S&P 500 supposedly consists of the 500 largest capitallization U S companies traded on the U S exchanges. Consequently, its components periodically change as some companies grow larger and other companies grow smaller or are consumed by other companies, which of course causes those companies to grow larger.
There are about 400++ other indeces for which stocks also have to be chosen. Some based on market capitalization. Some based on the particular industry the company happens to be in. Some based on which country the company happens to be located. Some based even on the PE of the company stock or the amount of the dividend the company pays. And maybe a couple of dozen other criteria.
Q: What is the type Dow Jones World Stock Index?
I know the DJIA is price weighted index, but is the Dow Jones World Stock Index price wieghted or market value Weighted?
A: Float-adjusted Market Capitalization
Q: How do you calculate the stock market index and what does it mean by????
I am really confused. What does it mean by the stock market index rose to 444.90 or something like that. I want something in details please.
A: Stock market indices are calculated from the quotes of the stocks of which they are composed. It is therefore a sort of average. If an index rose 1% to 445, then it just means that this average stock price rose one percent.
The number of stocks included and the exact way the calculation is done, is different from one index to another.
For instance: the Dow Jones is composed of 30 stocks, the 30 biggest companies in the US and the value is just the sum of the of the values of the composants, multiplied by a suitable number.
The SP 500 contains (you guessed it) 500 stocks, weighted by their size, and is therefore more representative for the economy as a whole.
Other indices take also in account the number of stocks in circulation, the amount of stocks exchanged each day, etc.
Q: How do I get started investing in stock index funds without paying those high initial investment minimums?
Fidelity's minimum for an IRA is $2500. I'd like to invest in three index funds. I have $4500 to invest. Can I invest 2500 in the first fund, then withdraw 1500 leaving 1000 in, invest 2500 in the second,then withdraw 1500, so this leaves me with 2500 in hand to invest in the third. Then even everything out so I have equal amounts in each. Please help I'd like to get started soon but can this work. Thanks in advance for your answers
A: Very easily. You can invest in the exchange traded versions. Buy as few as one share if you want. They are called index ETFs. Here is a link that will tell you all about them.
http://www.etfconnect.com/
My favorite is IWN.
Q: Where to find articles on "hedging with foreign currency denominated stock index"?
The foreign currency denominated stock index futures that I am referring may include US dollar dnominated MSCI Taiwan stock index, US dollar denominated Nikkei 225 index, US dollar denominated Nikkei 300 index. Where can I find any research that have covered these stock index?
A: Look in back issues of Investors Business Daily. Also Money and Forbes has had articles about this.
Q: How does the stock market indexes work? How do you compute for the stock index?
A: First order explanation:
DJIA weighs against the stock price for the 30 companies it tracks. For example Stock A is $40/share while Stock B is $20/share Stock A's movements will affect ~ 67% of the two stock "DJIA" index.
S&P 500 weighs against the market cap of companies. Therefore one ultra-cap company will have a dominate affect on the index movement verses many less large cap companies.
I only talked about two major indices but the formula for calculating their "price" is pretty involved.
Check out some books on stocks and indexes or visit websites like investopedia.com, fool.com, etc. Also the indices and stock exchanges have their own websites which will go into more detail.
Q: how weight of each stock in index is calculated?
how weight of each stock in index is calculated? if i am to calculate weight of each stock in portfolio, how should i do it? please do let me know as soon as possible?
A: Different indexes use different weighting techniques, but the most popular is to use market capitalization. That means they take the total value of the outstanding shares time the market price. I think that XOM has the largest market capitalization currently so it would make up the largest % of a portfolio such as the S&P 500 which is an index based on market capitalization. For that index they calculate the total value of all 500 stocks and then each stock in the index and divide by the total to give the % for that stock. The Dow Jones uses a different methodology not based on market capitalization. Their method is too confusing to attempt to explain.
Q: What stocks are in the Internet 50 Index?
Please list all. (Not just one or two).
What are the company names? (Not just the symbol).
A: AKAM
BRCM
CHKP
CIEN
CNXTD
CRM
CSCO
CTXS
DELL
EMC
EQIX
FDRY
JAVA
JDSU
JNPR
LVLT
MFE
NTAP
OPWV
ORCL
RNWK
SYMC
TIBX
VCLK
AMTD
AMZN
BIDU
EBAY
ELNK
ETFC
EXPE
FLWS
GOOG
IACI
INSP
INTU
JCOM
KNOT
MOVE
NFLX
NILE
OSTK
PCLN
SCHW
SINA
SKIL
STMP
UNTD
YHOO
VRSN
Q: Where can I download FREE e-book on Stocks, Options, Index, Futures Trading and all about investing ?
A: www.limewire.com
Q: How stock index futures can be used for hedging?
can sum1 plz help me with this question as it is a part of my assignment. thank you in advance.
A: well the whole idea of hedging is to reduce your exposure to some kind of risk. For example, if you are overweight equities in your portfolio relative to your benchmark or what you feel would be prudent exposure, you could hedge your exposure to a downturn in the market (you'd be hurt since you're overweight equities) by selling futures (value of short futures increases as index level falls). It works the other way with long futures giving you exposure to equity market returns.
Q: Is there can index that included all 30 stocks of the Dow Jones composite for purchase?
A: Yep, look up DIA. The American Stock Exchange has been selling this exchange traded fund, ETF, for quite a while now. Then look up SPY for the S&P500. There's piles more too.
Q: what can we hedge with stock index future?
i would to do a research on stock index future and would like to have some opinions from people who are familiar with the stock index future and could tell me what risk and financial instrument that we can hedge using stock index futures.
A: In finance, a stock market index future is a derivative financial instrument.
Market
The global market for exchange-traded stock market index futures is notionally valued by the Bank for International Settlements at $221,200 million in 2005.
Uses
Stock index futures are used for hedging, trading, investments.
Hedging using stock index futures could involve hedging against a portfolio of shares or equity index options.
Trading using stock index futures could involve, for instance, volatility trading (The greater the volatility the greater the likelihood of profit taking – usually taking relatively small but regular profits.
Investing via the use of stock index futures could involve exposure to a market or sector without having to actually purchase shares directly.
Please note the following cases of equity hedging with index futures:
Where your portfolio 'exactly' reflects the index (this is unlikely). Here, your portfolio is perfectly hedged via the index future.
Where your portfolio does not entirely reflect the index (this is more likely to be the case). Here, the degree of correlation between the underlying asset and the hedge is not high. So, your portfolio is unlikely to be 'fully hedged'.
Equity index futures and options tend to be in liquid markets for close to delivery contracts. They trade for cash delivery, usually based on a multiple of the underlying index on which they are defined (for example £10 per index point).
OTC products are usually for longer maturities, and are usually a form of options product. For example, the right but not the obligation to cash delivery based on the difference between the designated strike price, and the value of the designated index at the expiration date. These are traded in the wholesale market, but are often used as the basis of guaranteed equity products, which offer retail buyers a participation if the equity index rises over time, but which provides guaranteed return of capital if the index falls. Sometimes these products can take the form of exotic options (for example Asian options or Quanto options).
Pricing
Forward prices of equity indices are calculated by computing the cost of carry of holding a long position in the consitutuent parts of the index. This will typically be
The risk-free interest rate, since the cost of investing in the equity market is the loss of interest
Minus the imputed dividend yield on the index, since an equity investor receives the sum of the dividends on the component stocks. Since these occur at different times, and are difficult to predict, estimation of the forward price is something of an art, particularly if there are not many stocks in the chosen index.
Indices for futures are the well-established ones, such as S&P, FTSE, DAX, CAC40 and other G12 country indices. Indices for OTC products are broadly similar, but offer more flexibility.
Q: How do I invest into a stock index?
Or, what is the most economical way? Thru E*Trade, etc?
A: etrade, schwab, fidelity. all are relatively cheap. or, go to vanguard and buy an index fund.