It doesn't include every stock, but covers a representative sample. Trends in that sample closely match trends in the stock market as a whole. Another example is the Northern Spotted Owl, which is an indicator of the health of old growth forest habitat in the Pacific Northwest. Knowing the owl's status tells us the probable status of many other species of plants and animals, without having to evaluate each one individually. If the owl's healthy, the whole ecosystem is likely to be healthy.
Indicators are also like the gauges and dials of an aircraft's instrument panel.
By designing them carefully, watching them closely, and interpreting them wisely, we know the status of our flight and can make good decisions about where to go. Criteria for Indicators Not just any piece of data tells you what you need to know about sustainability. They reflect something basic and fundamental to the long term economic, social, or environmental health of a community over generations. Accepted by the community. Attractive to local media.