WHAT IS THE BEST STOCK INDEX TO INVEST IN?

still learing about batch markets though was wondering what batch marketplace I would be many expected to have the prolonged tenure distinction from investing in. My crony pronounced Nasdaq…any ideas??

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{ 6 comments }

Franky D February 11, 2011 at 11:05 pm

The one that goes up the most. Unfortunately you cannot know that until after the fact. One of the safest and most popular choices is the S&P 500 index.

tonypoe February 11, 2011 at 11:05 pm

Read the following:

How to Choose Index Funds
http://www.ehow.com/how_5743346_choose-index-funds.html

gosh137 February 11, 2011 at 11:17 pm

The S&P 500 is in index of large cap companies with a very few mid caps thrown in. The investing media has said that in the (long term) past, small/mid cap stocks have done better than large cap. Coming out of a recession like we are now, small/mid caps usually beat large cap for the first few months then large caps take over. So if you plan to hold for the long term, maye hold an index that contains all sizes of companies, one like Vanguard’s Total Stock Market Index Fund. Even though that fund is a “big basket,” you shouldn’t put “all your eggs into it.” Once you get additional funds, maybe look into a Total International Index fund and then a Total Bond Market Index fund.
There is another “school of thought” that says the above is hogwash and they are not the best index funds because they are market weighted. That means more money is put into companies with the highest market value than the smaller valued companies. In the case of “bubble companies”, like the internet stocks of 1999-2000, General Motors, MCI, Tyco, Enron, and more recently the big banks, the funds buys lots of their shares when they are overvalued and about to fall. As they fall, the fund must sell shares, at not the best of prices. So many people say index funds based on other than market weight (earnings, dividends, equal weight, etc) are better funds.
Maybe another responder is more familiar with these type of funds than I am and will give you more details on them.

Michael February 11, 2011 at 11:57 pm

Easy answer but you are probably not going to believe me. Unfortunately people always prefer to make investing (also life in general) harder than it has to be.

1. Identify all the broad market index’s that you are considering investing in, whether in be in the United States, Brazil, China, Europe, Emerging Markets …etc. If you want to really be detailed, you can also identify sub sectors if you want to…Technology, Health Care, Financial’s, Commoditieses, Retail, Consumer Staples..etc

2. Find Mutual Funds or ETF (Exchange Traded Funds) that emulate these index’s, and track them on Yahoo Finance site under My Portfolio. Have the same start or trade date for all…example..first trading day of 2010.

3. Invest in the Index that is going up the most in comparison to the others…you could even invest in more than one Index if you like. These will change over the years. Example, the Nasdaq was the leader for US index’s during the dot com era.

3. Track results and always stay with the Index or Index’s that are leading the others. Just as if you were tracking winning sports teams.

4. Good rule of thumb is to stay invested in an Index as long as it is trading above it’s 200 day moving average. You can find this by selecting the 200 day simple moving average (SMA) under the charting program on Yahoo Finance. Select technical indicator and enter 200 on simple moving average. When the index trades under the 200 day…move to money market or scale down your investments. I prefer being “out of the market” when it trades below 200 day moving average.

Blazenskyy.com February 12, 2011 at 12:02 am

NASDAQ is fine such as the QQQQ’s but only if you want a technology or high growth fund. Just beware that NASDAQ is finally coming to life however it’s heavy weighted with stocks such as Amazon, Apple, Microsoft, Google and Cisco. A better diversified choice would be the total stock market consiting of NASDAQ, American stock exchange and the NYSE which would have less tech stocks and the S&P 500 companies such as Procter & Gamble and GE.

woodnote February 12, 2011 at 1:01 am

You need to educate yourself more on stock market investing. There is nothing more valuable in stock trading than a good knowledge, strategy and decision profess for profitable trading.

If you’re really serious about learning, you should take a look at System Pro Trading. It offers you over 24 hours of video tutorial training by an experienced trader on how to become very profitable from stock trading.

http://www.systemprotrading.com

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