We’ve discussed some of the major stock indices in the US. You may recall the S&P 500, NASQDAQ, Wilshire and Dow Jones for short. Hopefully at least a couple of those ring a bell. But now we’re going to look beyond the US borders to four other major stock markets in the global trading arena. Specifically, we’re going to focus on Japan, Hong Kong, England and Canada.
Just to recall, how are the different stock indices weighted?
Before we dive into the different indices, let’s briefly recall the different types of stock indices:
Price-weighted: In a price-weighted index, each stock is weighted based on its proportionate stock price to the other companies on the index. As such, all the stock prices are cumulated and divided by the total number of companies. This results in an average stock price of all the companies on the index.
Market-cap-weighted: A market-cap-weighted index on the other hand, weighs each company stock in proportion to its overall market cap. Recall that the market cap is equal to a company’s outstanding shares times its stock price. Thus, the greater the market cap of a company, the more weight it carries in the index.
Here are the top stock indices outside of the U.S.
So now that we’ve got that out of the way, let’s explore beyond these US borders.
Nikkei 225 (Japan)
First up, we have the Nikkei 225, which is often referred to as the Nikkei or Nikkei Index for short. It is the primary stock market on the Tokyo Stock Exchange (TSE) based in Japan. And on that note, the TSE is the fourth largest stock exchange in the world based on its total market cap. It should be noted that this is a price-weighted index and is based on the currency of yen. Some say it is comparable to the Dow Jones in the US. In fact, it is the only price-weighted index on this list.
FTSE 100 Index (England)
Next we have the Financial Times Stock Exchange 100 Index, or FTSE, “Footsie” for short. It is comprised of the top 100 companies on the London Stock Exchange (LSE) based in England. The LSE is the third largest stock exchange in the world. In fact, the FTSE accounts for 81% of the total market cap for the LSE. Although, there is another index (FTSE All-Share Index) this is the most commonly referred to index for the UK. We should also mention that it is a market-cap-weighted index.
Hang Seng Index (Hong Kong)
Third on the list is the Hang Seng Index (HSI) based in Hong Kong. It is a market-cap-weighted stock index and is the primary indicator of the overall Hong Kong market. The 50 companies that comprise the HIS account for about 58% of the total market cap of the Hong Kong Stock Exchange.
S&P/TSX Composite Index (Canada)
The S&P/TSX Composite Index is the primary stock index in Canada and is listed on the Toronto Stock Exchange (TSX). It is comprised of about 250 companies that account for about 70% of the TSX market capitalization. It is the most commonly referenced stock market when dealing with Canadian companies.
As you can see, there are some very large stock indices that exist outside of the U.S. However, you may also realize just how much of an epicenter the U.S. is in the world of trading. Either way, you may decide to venture beyond U.S.-based stocks, so these other indices are great places to start given their popularity on the trading scene. This popularity ensures high liquidity too.
Remember, you can level the stock market playing field once you know what the professional traders know. Our Elite Legacy Education instructors will introduce you to the trading strategies that produce potential profit when stock prices are falling, lock in gains, reduce risk, and squeeze extra money out of stocks in your portfolio.
Learn more about Stock Success in our upcoming free interactive Online Training! Register Here VIDEO
Want the live experience? Attend an upcoming free workshop coming to your area! Register Here
Browse through our Rich Dad Education reviews by clicking above!
Founded in 1992, Elite Legacy Education is a recognized global leader in quality financial education. Legacy Education Alliance, Inc. is a leading provider of educational training seminars, conferences and services. Rich Dad Education offers real estate & stock training based on Robert Kiyosaki's book Rich Dad Poor Dad.