Your investing questions, our clear answers.

Our response:

Thanks for your question. When you hear that “the market is up,” people are often actually referring to an index. An index is a collection of securities or other assets that are meant to represent the performance of an economic sector or portion of the market in reference to a point in time. Indices can be broad or narrow in focus.

While people cannot usually invest directly in the indices themselves, they can invest in index funds. Index funds, which are sometimes referred to as index trackers, aim to follow or mimic the performance of a specific index; the value of an index fund will typically go up or down as the index goes up or down. Index funds are generally sold in the form of mutual funds or exchange-traded funds (ETFs).

Learn more about indices and index funds on GetSmarterAboutMoney.ca. Speak to a financial advisor to learn your investing options.