Investing in stocks is an art that requires research and analytical skills along with sound risk management tactics. When starting off, it is important that investors understand the different index funds that are available and how they can be used to build a profitable portfolio. For those new to the stock market, the SP 500, NASDAQ and Dow offer three well-known indices that have risen in popularity as a way to diversify a portfolio. In this article, we will be looking at two surprisingly simple, yet effective ways to track the performance of these three major stock indices.
The first method is to join an index-tracking ETF or exchange-traded fund. ETFs are investment products that allow investors to gain access to a variety of stocks in an index, without having to purchase individual stocks. ETFs are considered to be low cost, liquid investments which make them a great choice for those who want to keep track of an index’s performance without having to worry about individual stock risk. Most ETFs provide access to the stocks in the SP 500, NASDAQ and Dow, and are easy to track using a variety of different online tools.
The second method of tracking the performance of the SP 500, NASDAQ and Dow is to use an index fund. Index funds are a type of mutual fund that invests its assets in a specific index such as the SP 500, NASDAQ and Dow. Mutual funds are actively managed investments so the fund managers will periodically adjust the portfolio in order to capitalize on market trends. This makeindex funds a great choice for those who want to keep track of their investments over a long period of time. Like ETFs, tracking an index fund’s performance is relatively straight-forward and can be done using a variety of online tools.
In conclusion, tracking the performance of the SP 500, NASDAQ and Dow is surprisingly easy and can be done using two powerful methods. Exchange-traded funds and index funds are both low cost, liquid investments that offer access to a variety of stocks in each of the major indices. By tracking the performance of ETFs and index funds, investors can gain a better understanding of the stock market, as well as a reliable way to diversify their portfolios.
