What lies beneath

Lars Hamich ()
Additional contact information
Lars Hamich: STOXX Ltd, Postal: Selnaustrasse 30, Postfach, 8021 Zürich, Switzerland, http://www.stoxx.com/index.html

Journal of Financial Transformation, 2004, vol. 11, 48-51

Abstract: For most investors, an index is a number. The number tells them something about the current state of a market for stocks, bonds, credit derivatives, or some other instrument, be it foreign or domestic. For those that have invested in an index fund, the change in that number from day to day closely represents the movements of their portfolio. Not too many people think much about what it takes to produce that number, and the few that do usually regard the process as a bit murky no matter how clearly stated the index methodology may be. Imaginative folks may envision a troop of grumpy gnomes scribbling with quill pens, feeding their handiwork to awaiting index fairies that deposit the results under the pillows of financial publishers everywhere. In truth, of course, the process involves complex computer systems and endless cycles of research and adjustment. Like an iceberg, the visible part of an index misleads even informed viewers about the immensity, and the importance, of work that lies beneath the surface.

Keywords: Indices; index methodology (search for similar items in EconPapers)
JEL-codes: G11 G24 (search for similar items in EconPapers)
Date: 2004
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:jofitr:1360

Access Statistics for this article

Journal of Financial Transformation is currently edited by Prof. Shahin Shojai

More articles in Journal of Financial Transformation from Capco Institute 77 Water Street, 10th Floor, New York NY 10005.
Bibliographic data for series maintained by Prof. Shahin Shojai ( this e-mail address is bad, please contact ).