Why is a Stock Market Index So Important?
On Thursday night I had a wonderful night out enjoying one of my presents, a set of tickets to the tapings of The Debaters on CBC (at the Centrepointe Theater in Nepean). I had never heard of this show before I went that night, but I am now a fan, it is fast, witty, a bit raunchy and mostly fun.
The host Steve Patterson is a quick on his feet moderator who also injects his opinions along the way, and I stumbled across the shows YouTube archive and found this interesting tid bit about Stock Market Indexes.
The Movie is here if you are reading on RSS
The point is well made, why do you care if the TSX S&P 500 is up, if every stock that you own is down (and vice verse)? Now Mr. Patterson does miss the point that there are whole market funds that DO in fact own that index (and all the stocks in it), but still some valid and good points made.
Check out the archives of this show on line, well worth a listen.
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February 15th, 2009 at 8:53 PM
Aside from your original point, i would add that index’s should be used to track how well your portfolio is doing compared to the overall market.