Index is one kind of indicators show, for information, share price movements prepared by the stock exchange or financial services institutions.
Since the stock price fluctuations uncertain, investors will inevitably face market price risk.
For specific price changes in a particular stock, investors are easy to understand. For a variety of price changes in the stock, one by one to find out, is neither easy nor troublesome.
To accommodate this situation and need some financial services institutions use their business knowledge and be familiar with the advantages of the market, the preparation of the stock price index, publicly, as indicators of changes in market prices.
Accordingly, investors can test the effect of their investments, and to predict stock market movements.
At the same time, the press, the company owner and even political leaders, also as a reference index, to observe, predict the social, political and economic developments.