What is a market index point?
A stock market index point, usually mentioned in regards to well known indexes, such as the Dow Jones or the S&P 500, is a way to easily represent the changes in the value of a stock market index.Stock Market IndexA stock market index is a number that represents the combined value of a collection of market securities. Most indexes are made up of stocks, but some include real estate, bonds or other investments.Market Index PointsMarket index points have no real meaning other than representing the relative value of the index compared to its past values.FunctionThe advantage of using market index points is that it provides a simple and easy way to express rises and falls in the values of market indexes.UseTo use market index points, compare the value against a past value. For example, a rise in 500 points from 1,500 to 2,000 would represent a 33 percent rise in value, which is very significant. However, a 500-point rise from 100,000 to 100,500 is only a 0.5 percent increase, which is much
