An index isn't something you can buy directly — it's a measuring stick. The S&P 500 tracks 500 large US companies; the FTSE 100 tracks the top 100 UK-listed firms; the MSCI World spans developed markets globally.
You invest in an index indirectly through an index fund or ETF that replicates it. That's where the actual buying and selling happens.
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Open Decision Lab →Frequently asked questions
Is the Dow the same as the S&P 500?
No. The Dow Jones Industrial Average tracks 30 large US companies weighted by price. The S&P 500 tracks 500 companies weighted by market cap and is a broader measure.
Related terms
Index fund
A fund that mirrors an index rather than trying to beat it.
S&P 500
An index of 500 of the largest US companies, weighted by market cap.
ETF (exchange-traded fund)
A fund holding many stocks or bonds that trades like a single share.
Market capitalization
Share price multiplied by the number of shares outstanding.