To really understand stock indices, you should avoid some fallacies. We name the 10 biggest misconceptions about DAX, Dow Jones and Co.
In Germany there is only the DAX
The DAX is of course the most important and significant German stock index, as it reflects the performance of 30 large and important companies. However, it is by no means a loner, as there are dozens of other stock indices in Germany. Relatively well-known are the TecDAX for technology companies and the MDAX for medium-sized companies. Alongside these, there are also regional indices, such as the NISAX20 for Lower Saxony. There are also special indices for the real estate market (DIMAX) and for renewable energies (ÖkoDAX).
Stock indices are a "country matter
USA, Japan, Germany and even Ghana have their own stock exchanges and stock indices. But these are not always tied to specific countries. For Europe, for example, there is a whole series of important overall indices, such as the EURO STOXX 50 with the 50 largest listed companies in the euro zone. This index is managed by STOXX Ltd. in Zurich, which in turn is part of Deutsche Börse AG. The global financial interdependencies are therefore sometimes more complicated than initially thought.
Dow Jones and Nikkei are the largest indices
The U.S. benchmark index Dow Jones is one of the best-known indices in the financial world and in exness personal area. The Nikkei 225 - its Japanese counterpart - is also as popular as stock market guru André Kostolany. However, there are other indices that include significantly more stocks. One of the world's most important stock indices, for example, is largely unknown to the masses. The MSCI World combines shares of more than 1,600 companies from 23 industrialized countries and is thus a good benchmark for the development of the global economy.
The DAX is Germany's oldest stock index
It may sound surprising, but the DAX is actually a fairly young index. Its history only began on July 1, 1988, initially as a supplement to existing indices. In terms of awareness, the DAX has now easily overtaken its predecessors. Incidentally, the oldest index on the stock market in the Federal Republic of Germany is the FAZ Index, which has been calculated since 1961.
The Dow Jones accurately reflects U.S. economic performance
The Dow Jones Index, which has been published since 1896, provides a general indication of the economic development of the USA. However, other stock indices are much more informative. The S&P 500, for example, represents the American market much more accurately, since 500 American companies are listed here. In the case of the Dow Jones, there are only 30 companies.
