BasicsBeginner4 min

Stock Indexes: AEX, S&P 500 and More

An index is a basket of shares that shows how a whole market is doing in one number.

Why this matters for beginners

Understanding this helps you stay calm and read price moves correctly. This is general education, not personal advice.

Main explanation

The AEX follows 25 large companies on Euronext Amsterdam. The S&P 500 follows 500 large US companies.

Most indexes weight companies by size, so giants move the number more.

When the news says 'the market fell 1 percent', it usually means an index.

You cannot buy an index itself, but index funds and ETFs copy them.

Example using a real company

ASML is one of the heaviest companies in the AEX, so its moves pull the whole index.

  • →AEX up 1 percent: the basket of 25 shares rose on average, by weight.
  • →Your share down while the index is up: your share lagged the market.

Common beginner mistakes

  • ✕Thinking every share in an index moved the same way.
  • ✕Forgetting large companies dominate the number.

Key terms

Index
A basket of shares tracked as one number.
Index fund
A fund that copies an index.

Key takeaways

  • 01An index shows the market in one number.
  • 02Big companies weigh more.

Check yourself

  1. 01
    How many companies are in the AEX?
  2. 02
    Why does ASML move the AEX so much?
  3. 03
    How can you invest in an index?
Apply this in the Analyzer

Try the concept on a real company

Open an index heavyweight in the Analyzer and think about how it moves the index.

Educational examples only. Not buy or sell recommendations.

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Education only. TradeSensei does not provide personal financial advice or buy/sell recommendations. Examples and company studies are for learning, never instructions to buy or sell. Always do your own research.