Millennial Investing Lesson 801: Explaining a Stock Index: S&P/TSX Venture Composite Index

Millennial Investing Lesson 801: Explaining a Stock Index: S&P/TSX Venture Composite Index


hello and welcome back to the number one channel for Millennials learning about junior mining stocks. this is Galina
Nelson, accountant partner at GNA Financial Advisors and today we’ll be
talking about indexes. What is an index? well in simple terms and index is a
single number that summarizes a collection of data and is often used for
benchmark purposes, for comparison. The financial world creates and uses indexes
all the time. For example, how did the stock market do today?The S&P/TSX
composite was up a third of a percent on Friday, November 15th. The S&P/TSX
composite is the Canadian equity markets’ best known index. it summarizes lots of
data, share prices of 233 Canada’s largest public companies. Most equity
indexes are cap-weighted where a cap is short for a market capitalization. To
check out what the heck market capitalization is, check out our video
over here. The S&P/TSX composite index is cap weighted as well. An index
could also weight each company based on a share price. A stock trading at $30 would
carry three times the impact of the one trading at $10. This is how one of
the world’s most famous indexes, the Dow Jones Industrial Average, is structured.
An index is a tool used by investors and financial managers to describe the
market and to compare the return on specific investment. indexes play an
important role in the overall analysis of the equity markets indexes and their
movements provide a great deal of insight into the economy, investing
public’s risk appetite and the trends in investing diversification. Understanding
what it indexes makes following the financial markets more interesting and
more fun. you can use free financial websites such as Yahoo Finance to follow
stock index activity. Today I wanted to talk about the S&P/TSX Venture Composite index. it is an index that serves as a broad market indicator for the TSX
Venture Exchange that lists Canadian companies that do not meet the listing
criteria for the Toronto Stock Exchange. the index includes, at the time of record
in this video, 385 companies. note that it does not
include all companies traded on the venture exchange. it is revised quarterly
to add or remove companies in accordance with eligibility criteria as set by the
exchange. 53% of the companies making up this index are junior mining companies.
you can see that index has been pretty low for the past couple years. My
favorite investment advice is to buy low and sell high. so if you were looking
to pick up some TSX Venture listed stocks the best time for it was in January
of 2016. The second best time is now. and remember to seek out investment
advice before making any financial decisions. on that note thank you so much for watching, leave a comment down below for any future video requests. give this
video a “like” and I can remember to subscribe see you next time

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