MARKETS: Indicators and Measures
Usually there is a confusion of terms that are detrimental to the investor stock novice or apprentice bag. Is that like all things in life, also in the market tends to be more than one name for the same, or its inverse: the same name for different issues that some are related to each other.
A classic mistake is to confuse the market indexes. This error is based on some indexes, in general, take the name of the market to which they belong. At the same time in other cases, official rates are completely unknown market while perhaps the representative indicator of the market does not belong to that market.
Some examples
The leading index of the Bolsa de Comercio de Buenos Aires is the Merval, which brings together twelve leading companies that wheel. At the same time is called the institution Merval stock market is, the market itself. The lexicon used to this no problem because they know the difference and apply the term as appropriate to the context, however students or novices in the market tend to start asking questions about confusing the stock market with the index and vice versa.
Another useful example is the stock market in New York (NYSE) where the index NYSE COMPOSITE officially called, is not too famous or consulted and yet, a private index and the Dow Jones Industrial Average, is taken as representative in that market. The funny thing is that the Dow Jones has nothing to do with the NYSE, saving the fact that its 30 components, 28 traded on the New York. Saving this fact, it’s good to know that the Dow Jones index is a private, owned by Dow Jones Inc., which in turn belongs to the Wall Street Journal. The Dow Jones Industrial Average is modified by the decision of the famous newspaper editors after a thorough analysis.
The same event is repeated on the London Stock Exchange, which is the only index to the FTSE-phonetically-futsi curiously belongs to the Financial Times newspaper.
So now you know: do not confuse with market indexes and you have good financial health!
credit to: Patagon Argentina
Source: www.gestiopolis.com/finanzas-contaduria/mujeres/mercados-indices-y-acciones.htm
image source: http://pahtreaq.files.wordpress.com/2008/11/markets3.jpg
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