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Financial Advisor Gaithersburg MD: What is the Nasdaq?


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What is the Nasdaq?

Our financial advisors can lead you in the right direction for investing in your future today! First, what is the Nasdaq? The Nasdaq Stock Market, owned by the company NASDAQ OMX, is the second largest stock exchange in the world, behind the New York Stock Exchange. Notably, these are both American exchanges. When Nasdaq opened in 1971, it was an acronym that stood for “National Association of Securities Dealers Automated Quotations.” This has since fallen out of use, and “Nasdaq” is considered a stand-alone word.

The Three Tiers of Nasdaq

Despite being an American exchange, the Nasdaq includes and trades shares in international companies. It has three tiers; The Nasdaq Capital Market, the Nasdaq Global Market, and the Nasdaq Global Select Market. Companies are rated into these tiers by strict financial standards. Your financial advisor can provide you with more information on how your portfolio can benefit from exposure to these markets.

Though there are more than 5,000 companies included on the index, 90% of the movement in the market is captured by only 100 companies. The Nasdaq 100 is made up of smaller sections of the many sectors of companies included on the Nasdaq, and is what Nasdaq’s Exchange Traded Fund (ETF) is comprised. The Nasdaq 100 is generally not changed, unless certain criteria are met which make it necessary to rebalance. Your financial advisor can help you to decide how best to take advantage of this section of the market in your portfolio.

Two Ways to Invest

There are two ways to invest in the companies traded on the Nasdaq. The first, and simplest, is to purchase an investment tracking the Nasdaq 100. The second, more cumbersome way is to pick stocks of the individual listed companies. Most investors are unlikely to beat the market by trying to pick individual stocks. If you need more information about the Nasdaq contact CIC Wealth today; our Nasdaq financial advisors are here to help.

All indices are unmanaged and investors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Past performance does not guarantee future results.