This index is automatically updated after each transaction. The data is sent electronically to the Trading Floor and to brokerages around the world every 15 seconds. When you listen to the Evening News and hear the average stock on the New York Stock Exchange moved X number of cents, it is this index to which the reporter is referring. Often, this means that their stocks and their index are more volatile than the indices that measure larger, more capitalized companies. Because this index includes many companies in the technology sector where market trends change quickly, this index can be volatile.
Indices often reflect trends in the market and in the economy.
Watching overall market performance can be the key to making smart decisions about your individual investments. Comparing today's Market movement with similar market movements from the past may help you become aware of trends, and the best times to buy or sell. You may want to create an Index of your own stocks so you can measure your own investments against the performance of the more established indices. As an illustration of how to do this we have created Monty's Index. There are a couple of ideas to keep in mind when analyzing indices.