With the growth of index investing, it is imperative that your students understand the various indices and what they consist of and their similarities and differences. This infographic from the Visual Capitalist will help:

Questions for your students:

Which index am I?

• Rank order the indices from oldest to youngest?
• Has the most companies in it? How many?
• Has the fewest companies in it? How many?
• Generally considered the best representation of the U.S. stock market?
• Associated with technology and fast growth companies?
• Is weighted by the market capitalization of the companies within it, so the larger companies as measured by market value have a larger impact on the performance of the index?
• Is a price weighted index, so stocks with a higher price will have a larger impact on the overall index?
• Is an example of a diversified portfolio?

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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