Investors might have heard the term ‘Index funds’. Some of us still have doubt on what it exactly mean. Index fund tracking a stock index that comprises various equities. Here is a beautiful description about what exactly a stock index mean.
An Index shows how a specified portfolio of share prices are moving in order to give an indication of market trends. It is a basket of securities and the average price movement of the basket of securities indicates the index movement, whether upwards or downwards.