Written by The NASDAQ (National Association of Securities Dealers Automated Quotations) is a stock exchange and an index that primarily tracks the performance of technology and growth-oriented companies. The NASDAQ Composite Index includes over 3,000 companies, with a heavy concentration in the technology sector, including some of the world’s largest companies, such as Apple, Amazon, Microsoft, and Alphabet (Google’s parent company).
The NASDAQ is often seen as a gauge for the performance of the tech sector and growth stocks. As such, it is generally more volatile than other indices like the S&P 500 or the Dow, as it is heavily influenced by the performance of high-growth, high-risk companies. The index is also weighted by market capitalization, meaning larger companies have a greater impact on the index’s performance.
Investors who are interested in technology stocks or are looking to benefit from the growth of the tech sector often turn to the NASDAQ Composite Index or exchange-traded funds (ETFs) that track it. The index has historically delivered higher returns compared to other indices, but it also comes with increased risk due to the volatility of the technology sector.
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