index stocks
index stocks questions and answers
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Q: How do you actually make money from stocks,index funds etc?
For stocks, do you just buy them and hope that they go up in value? I heard that some stocks pay you money annually just so you have them. What about index/mutual funds? Also, could you give examples of such stocks/funds.
A: Essentially, yes, you just buy them and hope they go up in value. In the long run, the stock market goes up a bit each year, so eventually your stocks are quite likely to be worth more. There are other ways, plenty of other ways, to make money in the stock market, but it gets complicated. You can also try to be a day trader, but it takes serious dedication and a fanatical devotion to financial news to try to discover stocks that are about to swing up or swing down, and it's dangerous and easy to lose your money.
Index funds just buy a selection of stocks that correspond to whatever that index has in it - say, the Dow Jones or the S&P. Those indexes track a certain number of stocks, and index funds spread your money across those same stocks. They generally do pretty decently. Again, though, you may have to play the long game to make a lot of money.
Some stocks do pay dividends quarterly or monthly. They're usually larger companies. Don't expect to get rich that way, but it's a nice little bonus. Most of the oil companies pay dividends, as do the railroads. There's a few stocks that are specifically tailored for dividends, like HYI.
Q: Would dollar cost averaging be good for Index funds or stocks ?
I don't want to time the market. I want to use dollar cost averaging.
Would it be wise to use dollar cost averaging on index funds like s&p500, Dow Jones, etc.
Or would it be better use dollar cost averaging on 3-4 stocks like in GE PFE MSFT (I'm thinking of strong blue chip companies).
Thanks
A: You can use it for either. when it comes to stocks or index funds its a question of risk. Owing 3-4 stocks is much riskier than owing an index, even over time.
Also consider cost, by dollar cost averaging in stocks you will be making 3-4 times as many transactions than buying and Exchange Traded Funds such as the SPY.
Q: How would I create an index for a portfolio of stocks?
I want to create an index for about 50 stocks in a portfolio to track their performance. I want the index to be similiat to the S&P 500 so that it will account for stock splits and other factors.
A: In a spread sheet maybe you could multiply the stock price by the outstanding shares then divide by the total. But that would give you an index that is weighted by market cap.
Or you could just add up all the stock prices and divide by 50. Then if one split you would have to add an adjust factor to that particular stock as in for a 2 for 1 split that would be stock price times 2.
That would result in stocks with higher prices having a greater influence.
Or in a stock tracking portfolio where you can enter dollar amounts just put in the same $1,000 starting value for each stock making your index start at $50,000 then track the ups and downs. That would let you see how the individual stocks perform with the individual values at any time.
The last one certainly is easiest and they would do the split adjustments for you I think.
I doubt any stocks are splitting any time soon. Maybe a reverse split with these low prices.
Q: What were the list of stocks that made up the S&P 500 index given any time over the last 10 years?
I wish to backtest some trading ideas over the last 10 years on the stocks that make up the S&P 500 index.
To do so, I want to recreate the S&P 500 index over the last 10 years. i.e. know the constituent stocks of the index at any stage, and then recreate the historical data for that time. I will probably make 3-monthly chunks of historical data for the stocks, including those that are now delisted.
Where can I get this information for free or for a small charge? A list of changes (up to the year 1996) may suffice.
A: S&P has this information on their web site -- but it just goes back to 2000. The link is below.
You might be able to get this information from the CRSP database -- which can be accessed through WRDS (Wharton's data system). This data is not cheap -- but if you are at a business school or are an alumni from a business school, you might be able to access it through the B-School's library for free.
Q: How will reducing the number of constituent stocks in an index affect the index?
Hi, there are recent news that the Straits Times Index (STI) in Singapore will have constituent stocks reduced in number, so that only blue chip stock will remain in the STI. How will that affect the index besides making the index more volatile?
Will that affect share prices of STI ETF 100?
Thanks!
A: With all due respect, I disagree with the above person.
The STI should experience higher volatility with only 30 constituents compared to before. While there is a high degree of cross-correlation between the current 50 members of the STI. Furthermore, the 50 STI members tend to have a lower Beta compared to the SGX Composite.
The argument that the Dow has a lower volatility than the Nasdaq is not a fair comparison. The DJIA has a much lower Beta compared to NASDAQ Composite. On the other hand, the DJIA has higher system (diversifiable, company specific risk) compared to the Nasdaq composite. That is, NASDAQ is more sensitive to the "market". In other word, the NASDAQ composite has higher market risk, but lower systemic company risk. The DJIA has lower market risk, but higher systemic risk.
Mathematically, you need about 80 stocks to really remove a lot of the system risk. By reducing the number of stocks from 50 to 30, the index will have a higher degree of volatility. However, the STI components currently have a high degree of cross-correlation - so there should be very little change in beta.
Q: what do the symbols in the stocks index represent?
When reading the Wall Street Journal or the business section in a newspaper all the stocks symbols are displayed but none explains what they mean.
A: The previous posters are correct, but I don't think they understood your question. The abbreviations, like MSFT for Microsoft are called "symbols", but I suspect you're referring to the other symbols. These indicate how a given stock is performing.
Here's a link that explains it pretty well.
http://www.esource-news.com/index.php/m/articles/id/22
Q: where can i get nse index&stocks particular day chart?
i need one month before index and stocks chart(examble: 12.02.2009
this particular date full up and down chart).how can i get?
A: There are many sites that can vive you the historical data of the NSE or any other stocks.
But Data along with the charts you find it on
http://www.vantagetrade.com/do?sy=06
Just type in nifty in the search bar and you can view the chart with historical data
Q: How do I find stocks that track the downside of an stock index,etf,or stock?
A: I use Yahoo / Finance. Run around in thee and you'll find biggest gainers / loosers, with a list of the stocks moving each way, etc.
Q: Since stock index funds buy the same stocks as the index, won't their prices become artificially inflated?
My understanding of the DOW or S&P500 index funds is that if GE represents say 1% of the S&P500, it will represent 1% of the value of the S&P500 index funds.
Since many people invest in these index funds to represent the market, won't any company in the index be artificially inflated in price due to heightened demand?
Another way to ask this is: Do companies that join an index experience a bump in share price & do companies that leave experience a drop within a short amount of time?
Thanks!
A: "Another way to ask this is: Do companies that join an index experience a bump in share price & do companies that leave experience a drop within a short amount of tim"
Yes, there's a well known "index-effect". There's even a bit of a game of trying to guess which companies will be added to the index.
Companies are deleted from the index usually because of acquisition, or bankruptcy. Very rarely are they "just deleted", so a "deletion effect" is less common.
Q: Where can I find stocks that follow index funds but at a lower price?
I want to put some of my money into a index fund, but I don't have much money.
A: Well, then you need a cheaper index.
Have you looked into ETFs (exchange traded funds)? I can buy into the whole Standard & Poors 500 list by buying, just like a stock, SPY (about $133 a share right now). Or the Dow Jones Industrials, DIA (currently about $123). Or maybe shell out just a little under $70 a share to buy into the biggest (by market capitalization) companies on the New York Stock Exchange? Yet again, for close to $74 a share you can buy IOO, the 100 (notice the Os and zeros) biggest publicly-traded corporations in the broader world. Finally, for a bit under $14 right now, you can buy into the biggest players in nanotechnology by getting PXN.
These aren't indexes, there are the full inventory of the companies in the criteria held in trust, for which you buy shares just like common stocks. Management fees are dirt cheap (check out ishares.com for some examples in detail). Still, some of these are indexes (like IYY or NYC), so a representative sample is held.
Q: Where should I invest $10,000 in the stock market? Should I just stay safe with Index Stocks?
A: How is an index going to be safe?
I just did a screen where I sorted by stocks that have increased in the past five trading days and the past 4 weeks. Interesting list.
HMY, Harmony Gold
ABX, Barrick Gold
KGC, Kinross Gold
COA, Coachman Industries
GG, Gold Corp.
GFI, Goldfields International
AEM, Agnico Eagle Mines
JAG, Jaguar Mines
Hmm, except for Coachman, I think I see a trend here for right now.
Q: Can someone give me a link to index funds for short selling stocks?
Someone had posted a link to some sites that actually had index funds that shorted certain segments of the market. I forgot to bookmark it and now I can't find it.
You Da Man, Nick. Thanks!
A: Here is the link:
http://www.proshares.com/funds
Q: What stocks are included in the Mexican Bolsa IPC stock index?
A: The Bolsa Mexicana de Valores or BMV is Mexico's main stock exchange. It is headquartered on the prestigious Paseo de la Reforma in central Mexico City.
Contents [hide]
1 Structure and Operations
2 BMV Indices
3 Listed companies
4 See also
5 External link
[edit] Structure and Operations
BMV is a private limited company, with the exchanges shareholders consisting exclusively of authorized brokerage firms, each of which owns a single share. The exchange trades debt instruments including federal Treasury certificates (CETES), federal government development bonds (BONDES), investment unit bonds, Bankers acceptances, promissory notes with yield payable at maturity, commercial paper and development bank bonds. In addition, it also trades stocks, debentures, mutual fund shares, and warrants. Trading is conducted electronically through the BMV-SENTRA Equities System. Settlement is T+2, and trading hours are 8:30 a.m. to 3 p.m. for the capital markets and 8 a.m. to 2:30 p.m. for debt instruments (Monday through Friday).
[edit] BMV Indices
The BMV calculates 13 indices of stock prices. Each index can be used as an underlying value for derivative products listed on specialized markets. The main benchmarck stock index is called the IPC, which stands for Índice de Precios y Cotizaciones, and is the broadest indicator of the BMV's overall performance. It is made up of a balanced weighted selection of shares that are representative of all the shares listed on the exchange from various sectors across the economy, and is revised twice a year. Weight is determined by market capitalization. The IPC's value is related to the previous day's value, rather than the base date of October 30, 1978. Indice Mexico (INMEX) is a market capitalization weighted index of 20 to 25 of the BMV's most highly marketable issuers, using their most representative series. The sample is limted to issuers with a minimum market value of $100 million and is revised every six months. The weighting cannot be greater than 10% at the start of each calculation period.
[edit] Listed companies
América Móvil
Cemex: Cement maker
Coca-Cola Femsa
Grupo Corvi: consumer products distribution
TV Azteca
Televisa
Telmex (Teléfonos de México in full)
Vitro SA: glass company
Walmex: retail chain
Q: Why index are more volatile then individual stocks?
I'm not allow to write "index put" only "equity put".
It look to me that individual stock in more volatile.
Index reflect the average of the all market, so it shuld be less volatile.
If as Mike S wrote
"An index, on the whole, is always less volatile than individual stocks... some stocks even lose all their money due to bankruptcy... you simply won't find all the stocks in any index used today having all those companies go bankrupt at exactly the same time."
One not allow to write "index put" only "equity put"?
A: Microsoft might move $1 in a day. AAPL might move $2-3.
OEX might move $5-10, NDX might move $10-20, SPX might move even more
The Dow regularly goes up/down a hundred points.
If you're on the wrong side of one of those trades on even a normal day, you could lose A LOT of money.
The firm needs to protect itself in case that happens and will authorize accts to ensure its best interests are considered first.
That said, once you've backtested and papertraded trading indexes and have a high expectancy ratio, there's nothing to say you couldn't reapply for level 5 authority (to sell naked index options). Just be very careful whatever you do.
In the meanwhile, there's nothing wrong with doing credit spreads or some directional calls/puts that are a little in the money to get the majority of a move.
Hope that helps!
Q: What stocks are included in calculating the CBOE S&P 500 BuyWrite Index (BXM)?
Please if anyone can help. I googled till about 10 pages and still couldn't find any stocks. Does the BXM index use the same stocks in the S&P 500?
A: <<