According to Schick (2015), An index is a statistical measure of change in an

economy or a securities market. Each index has its own calculation methodology and is

usually expressed in terms of a change from a base value. Some of the popular and well-

known indexes are the Dow Jones, the S&P 500, the Nasdaq 100 and the Wilshire 5000.

Investing in an index fund is a form of passive investing. It helps to buy out stocks of

some of the best-known companies. It can be of a great help to the investors as it will

help them in analyzing he risk that are related with the investment and help them to

reduce the risk and increase the returns, helps to keep the information as well as record

the market (Lang, Ofek, & Stulz, 1996).

In my opinion, there should definitely be the index of investment firm that firms

can refer to while investing their money. Index of investment sets up some standards that

the firm can use before coming to the ultimate decision of whether to invest the money in

a particular investment or not. For any investor it is a matter of high priority that he or

she should carefully analyze and investigate of whether the investment in a certain field is

to be made or not and investment index can guide the investors by sweeping out their

dilemma. Index investing is very cost efficient. Index funds only invest in companies,

which are in index.

Investors are mainly attracted by the rate of return. So, they want to invest in

those businesses, which provides high rate of return with low risks. Investors always

want to invest in those businesses, which give them high profit in future. Many investor

hire advisor for selecting which project to invest for good return by paying fee to them.

When the index is provided to the investor it will be easy for them to select the right

project for investment. These index can also contain the various information like market
share, financial data, stock prices and so on of the firm further helping investor to

evaluate the firms. This information reflects fundamental financing opportunities to the

investors.

Therefore, there should be an index of investment firms that investors can refer to

when investing their money.

References:

Lang, L., Ofek, E., & Stulz, R. (1996). Leverage, investment, and firm growth. Journal of

financial Economics, 40(1), 3-29.

Schick, K. (2015). An Introduction to Stock Market Indices.