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Understanding Market Index and The Need for Index Calculator

A market index is a hypothetical investment portfolio containing investment holding representing a part of the financial market. You can carry index calculations by looking at the values that come from underlying holdings. Here, some are based on revenue-weighting, market-cap weighting, fundamental-weighting or float-weighting.


Why it’s necessary to keep track of the market index?

Investors regularly follow different market indexes to benefit from their movements. The three most vital index to track includes DJIA, Nasdaq , and S&P500 index. However, it is only possible to gauge the trends when you have accurate investment calculations. This way, you will know whether you have to use one of your well-established indices to start or make a white label index your personal intellectual property. 

How does an index calculator help you in these?

No matter the case, whether you are already a seasoned investor or seeking to get started on one, you will need an index calculator. It will help you come to a conclusion on how to meet your goal. It can show you factors like risk tolerance, initial investment and frequency of contribution. Also, how it can affect your money growth. 

Nowadays, it is most popularly used in thematic investing in managing the weights. For example, you may consider a risk-weighted distribution or market-cap weightage of ETFs/stocks in the theme. However, you can always shuffle and customize your investment portfolio depending on how much risk you want to take. 

Know more about thematic investing

It is an investing method quite popular among investors in which they identify future opportunities and invest in popular trends without much research. For example, if you notice electric vehicles are going to have a stronghold on the market, you can invest in a theme that supports the view. 

It solves the problem of those investors who do not have an appropriate equity portfolio. It's not because they have the wrong investment approach but because of a lack of time and expertise. 

Suppose you are looking for such services to build a robust investment portfolio and seize all the coming opportunities in the financial market. In that case, you can come in touch with us—Visit https://www.indxx.com/ for more information. 

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