US Indices and market sectors

Many investors who like to simplify their investing while still creating a diversified portfolio will utilize index funds. These funds offer a passive investing style becuase rather than actively buying and selling stocks they simply hold the stocks that make up the index. Trading this way insures that you do as well as the overall market. Because their is no active trading, index funds offer low overhead costs. The fund manager still must buy and sell stocks when the index changes or to react to new investments and redemptions, but otherwise the manager has little to do.

Here is a reference list of some very common US indices along with their trading symbol.

Dow DJI
NASDAQ composite IXIC
S&P 500 GSPC
Wilshire 5000 DWC
Russell 2000 RUT
Philadelphia Semiconductor SOXX
Dow Transports DJT
Dow Utilities DJU
NYSE Composite TVN
AMEX Composite XAX

In addition to indexes, investors can choose to utilize market sectors as an investment vehicle. There are index funds for nearly every market sector such as the Dow Transports or Utilities. This method of investing requires much more work, since you will want to diversify your holdings across numerous sectors. You will also want to be actively moving between sectors since "sector rotation" takes place, meaning certain sectors will perform better than others depending on how the overalll domestic or global economy is doing.

Here is a list of some of the common sectors. You will be able to find a index fund for most all of these sectors.

Auto Manufacturers
Major Biotechnology
Business Software & Services
Chemicals Major Diversified
Communication Equipment
Conglomerates
Diversified Computer Systems
Diversified Investments
Diversified Utilities
Drug Manufacturers Major
Electric Utilities
Food Major Diversified
Industrial Metals & Minerals
Major Airlines
Major Integrated Oil & Gas
Money Center Banks
Property & Casualty Insurance
Semiconductor Broad Line
Telecom Services Domestic
Tobacco Products