Your stock market questions answered

[Undertoad]

My 1948 Toadie stock sells at 500 shekels, which is informative for people trading in 1948 Toadies. Let's say two other people are issuing stock for 1948 cars. The "1948 Representative" stock sells for 400 shekels, and the "1948 Celebrant" sells for 250.

You add all the prices for the 1948 cars, and average it, and you would then have a rudimentary average price for 1948 cars. That is an "index" of how much people are paying for 1948 cars.

If my Toadie's price goes up but the others go down, maybe it's just because of something to do with Toadies, and not just about 1948 vehicles in general. The index tells you better information about cars.

Similarly, with the prices of all 1940-1950 Toadies, you'd know generally what people were paying for 40's era Toadies. If the price went up you might suggest that there was a rising interest in such things.

If you indexed ALL the stock, not just for cars but for everything, you'd get one picture of the economy: how much people were investing in total, how much money wound up in the markets. The NYSE tells you how much people were investing in the NY Stock Exchange. The FTSE tells you about other markets.

I'm not sure why they report this information. The day to day change is not interesting unless it's a large leap up or down. The trend up or down is more important.