Stock Market Index

I am investing in Public Mutual unit trust. Thus, I always using the online performance chart to see the ups and downs of my fund. The company has done a great job by presenting the performance using chart, which i finds realy helpful and easy to understand. Well, on each performance chart, there are two lines indicating the fund performance and marke index performance. I never try to find what that Index line is trying to show. I always assumes that it shows the average performance of stocks in that particular category. So, I better get a clear definition on what the line try to represent.



As usual, goggling the definition of stock market index....



Definitions of Stock Market Index on the Web:

• A representation of the value of securities that constitute a given market sector or industry. Indexes often serve as barometers against which ...www.confidentstrategies.com/glossary.htm


• An index shows how a specified portfolio of share prices are moving in order to give an indication of market trends.www.maaklmutual.com.my/ASP-bin/Public/mutGlossary.asp


• stock index: index based on a statistical compilation of the share prices of a number of representative stocks wordnet.princeton.edu/perl/webwn


• A stock market index is a listing of stocks and a statistic reflecting the composite value of its components. ...en.wikipedia.org/wiki/Stock market index