Last: 
JCI Is?
JCI is a group of stocks that are averaged together to provide an overall view of a particular sector or industry. The word composite basically means a combination or combination of many things to form one big picture. Composite hockey sticks mean they are made from a combination of different materials such as fiberglass and aluminum. The same goes for the Composite Stock Price Index – they combine data from several securities that intend to give you a big picture of the stock market. The Dow Jones Industrial Average is a Composite Stock Price Index. What makes it so? Because the Dow combines thirty of the world's largest companies and flattens them together to give us one easy-to-use data point to measure stock market performance. In the case of the Dow, the index is price-weighted, meaning that the weight of the stocks in the index is determined by how expensive one share of the stock is. For example, Apple (which is currently trading in the $280 range) has more influence on the index's calculations than Pfizer (which is currently trading in the $40 range). Each Composite Stock Price Index has its own methodology for weighing components. For example, the MSCI USA Equal Weighted Index weighs all its components equally, while the S&P 500 weighs its 500 components based on its market capitalization.Getting to Know the Types of Stock Indices You Need to Know
How to Read JCI Is
The Dow Jones industry average, also known as the Dow; S&P 500; and the Nasdaq composite are the three major US stock market indices. They act as indicators of the direction of the stock market and react strongly to both positive and negative financial and world news. Each index focuses on a different segment of the stock market and measures market sentiment.
Understand that each index calculates its value differently
The Dow is price-weighted, which means a $1 change in a $20 stock has the same effect on the index as a $1 change in a $70 stock. The S&P 500 is a weighted average index, which means that larger companies will have a proportionally greater influence on the value of the index than smaller ones. The Nasdaq Composite is a market value weighted index, which means the value of the index is based on the last trading price of a stock multiplied by the number of shares outstanding.Remember that each index reflects the general economic and market conditions differently
The Dow is made up of 30 of the largest and most influential companies in the country, including General Electric, AT&T and IBM. As such, the Dow reflects the price movements of some large companies rather than the broader market. Compared to the Dow, the S&P 500 is a better measure of the overall health of the economy. It contains 500 stocks representing different segments of the economy rather than focusing on a few large companies. The Nasdaq composite concentrates on technology stocks and includes tech heavyweights such as Apple, Google and Microsoft.
Use a free financial site, such as Yahoo Finance, to keep up with stock index activity
The Dow, S&P 500 and Nasdaq composites are quoted and read in points, not dollars. They also measure the percentage change in the stocks that make up their index. For example, if the Dow opens in the morning at 13,500 points and closes up 25 points at 13,525, it will be reported as a 0.19 percent gain on the Dow. Looking at another example, if the S&P 500 opens at 1,470 points and ends the day up 1.50 points at 1,471.50, it is reported as a 0.10 percent increase. Likewise, if the Nasdaq composite starts the day at 3,110.00 points and closes 5.00 points lower at 3105.00, it is reported to be down 0.16 percent.
Stock Price Index, from Function to Profit
The function of JCI is
There are several functions of JCI, namely:
1. Showing Market Movement
JCI functions to show the movement of stocks that are currently on the floor in the capital market. That way, capital market participants can analyze the passion for buying and selling investment instruments in real-time in a country.2. Securities Portfolio Performance
JCI functions to display benchmarks for the performance of securities portfolios to prospective investors before entering the capital market. The JCI chart presents information related to the average stock price that can be used as a benchmark in making decisions.3. Estimated Investment Development
JCI can provide profit estimates for investors. The percentage of data displayed in the JCI can be used as a standard to find out how much the estimated development of investment in the capital market is.
Terms About JCI
Here are some terms that are commonly used in JCI. These terms are:Portfolio
An investment portfolio is a collection of assets and can include investments such as stocks, bonds, mutual funds, and exchange-traded funds. An investment portfolio is more of a concept than a physical space, especially in the age of digital investing, but it can be helpful to think of all your assets under one metaphorical roof. For example, if you have a 401(k), an individual retirement account, and a taxable brokerage account, you should look at those accounts collectively when deciding how to invest them.Liquidity
Liquidity in finance refers to the level of ease with which you can sell an asset, interest, or security without affecting its price. High liquidity means that an asset can be easily converted into cash for its expected value or market price. Low liquidity means that the market has few opportunities to buy and sell, and the asset becomes difficult to trade. The liquidity of an asset can also refer to how quickly it can be converted into cash because cash is the most liquid asset. You can calculate the liquidity position of a company or a person through a ratio analysis, which compares an entity's assets to its liabilities. An entity is said to be solvent if its total assets are higher than its liabilities, meaning they can pay their debts and still have the remaining working capital.Fluctuations
Price fluctuations can be defined as irregular upward and downward movements. The term price fluctuation refers to the movement or change in the price of a commodity or group of commodities in a particular market or market area. Given commodities and markets, price changes over time essentially mean price fluctuations.Cut Loss
Cut loss means cutting losses. This is one of the risk management in investing, which is defined as selling stocks at a loss (below the capital price) to avoid further losses.Buyback
A buyback or share buyback is a corporate action where a company buys back its shares from its shareholders. Usually, companies buy back shares at a price higher than the current market price. There are two types of buybacks: tender offers and open market offers.Bubble
The stock market bubble is driven by crude speculation. Bubbles begin to form when there is an acceleration in price collection for assets that far exceed the intrinsic value of the asset. That means people are willing to pay more and more for other securities or assets, above and beyond what is expected based on things like demand, revenue, revenue, or growth potential. Irrational excitement is a phrase popularized by former Federal Reserve Chairman Alan Greenspan to describe the collective enthusiasm among traders and investors that fuels rapid price increases that outpace the underlying fundamentals. Whether you call it crowd mentality, herd bias, the opt-in effect or FOMO, there is a continuous cycle in which people want to buy an asset because its price is rising, pushing the price higher and making more people want to buy it.How to Read Bullish Stocks and What Are Their Characteristics
Other Stock Indices
Here are some other stock indices, namely:IDX80
The Indonesia Stock Exchange (IDX) issued a new stock index, IDX80. This index contains 80 stocks with a calculation of the fundamental weight of stocks circulating in the community or also called free float. The difference between the IDX80 and other IDX benchmark indices is that there is a 9% limit. This means that one stock in the IDX80 will not exceed this weight. IDX80 is expected to be the benchmark of choice for investment managers to create mutual fund products, both actively and passively.LQ45
The LQ45 Index, which is compiled by the research and development division of the Indonesia Stock Exchange (IDX), consists of 45 stocks that meet a number of certain criteria. One of the main criteria is that these stocks are among the most liquid traded on the IDX. The composition of the LQ45 index is adjusted twice per year (in February and August).IDX BUMN20
IDX BUMN 20 is an index that contains 20 shares of state-owned companies or SOEs (State-Owned Enterprises) that were selected because they have the criteria for standardizing the index and of course have good performance.Jakarta Islamic Index 70 (JII70)
JII is one of the stock indices in Indonesia that operates based on sharia principles. The establishment of sharia instruments aims to support the sharia capital market in Indonesia which was launched on March 14, 2003 (Utami & Herlambang, 2016). In addition, JII is one of the benchmarks for the performance of sharia stock indexes, in terms of the dominant choice of products to invest in the form of sharia mutual funds. Benchmarks have been commonly used to assess the performance of investment managers in managing funds. After knowing about JCI, how to read, functions, several terms in stocks, and other stock indices. You can also read other articles on the GIC Journal. If you want to trade, register to be able to trade with capital starting from 150,000 Rupiah!
