What is indexing in economics?

Indexing is also used to refer to passively investing in market indexes to replicate broad market returns rather than actively selecting individual stocks. Indexing is used in the financial market as a statistical measure for tracking economic data. Indexes created by economists provide some of the market’s leading indicators for economic trends.

What are indexes in investing?

In investing, indexes are benchmarks that are used to measure the performance of fund managers and portfolios. It can also refer to a passive investing strategy that aims to mimic broad market returns rather than picking individual stocks.

What is a financial index?

A financial index produces a numeric score based on inputs such as a variety of asset prices. It can be used to track the performance of a group of assets in a standardized way. Indexes typically measure the performance of a basket of securities intended to replicate a certain area of the market.