What do investors need to know about market indexes?
A. Market indexes help investors evaluate trends on investment patterns. Although they shouldn’t be taken as an absolute forecast, indexes help provide a means for comparison. Numbers may indicate change and these should be taken into consideration by investors who are too eager to buy or sell stocks. Remember that indexes do not represent the entire stock market. They are not as accurate as you think they are, considering that most results are still based on economic indicators or news on actual trading of stocks. Hence, it would still be best to keep an eye on your target stock from a bottom up perspective and make your own evaluation.
