Definition§
The NASDAQ Global Select Market Composite is a market capitalization-weighted index that consists of over 1,400 stocks, both U.S.-based and international, which meet the NASDAQ’s stringent financial and liquidity requirements, as well as corporate governance standards. This index reflects the performance of stocks listed on the NASDAQ Global Select Market, which is one of the three tiers of the NASDAQ exchange, known for its high standards and exclusivity.
NASDAQ vs Other Markets Comparison§
| Feature | NASDAQ Global Select Market | NASDAQ Global Market | NASDAQ Capital Market |
|---|---|---|---|
| Exclusivity | High | Moderate | Low |
| Financial Requirements | Stringent | Moderate | Lenient |
| Market Capitalization Levels | High | Moderate | Low |
| Number of Stocks | About 1,400 | Numerous | Varies |
| Governance Standards | Stringent | Moderate | Lenient |
Examples§
- Market Capitalization: If a company has a market cap of $10 billion and its stock represents 1% of the total market cap of the index, the stock influences the index with a weight of 0.01%.
- Liquidity Requirements: A stock must consistently outperform other listings in trading volume.
Related Terms with Definitions§
- Market Capitalization: The total value of a company’s outstanding shares, calculated by multiplying the current share price by the total number of shares.
- Liquidity: The ability to quickly buy or sell an asset without causing a significant change in its price.
- Index: A statistical measure that reflects the composite value of a selected group of assets.
Visualization§
Humorous Insights§
- “Investing in stocks is like dating: the more exclusive you are, the more you think you’re the best catch!” 🐟
- Did you know? The tickers for stocks in the NASDAQ Global Select Market often spark more joy than a toddler with a new toy! 🎉
Frequently Asked Questions§
Q1: How often are the stocks in the NASDAQ Global Select Market Composite reviewed?
A1: The stocks are typically reviewed every October to assess their eligibility.
Q2: Can a company lose its status in the Global Select Market?
A2: Yes, if a company falls below the required standards, it can be downgraded to a different tier.
Q3: What are the main advantages of investing in the Global Select Market?
A3: Investors benefit from higher company quality, better financial health, and stricter governance.
References to Online Resources§
Suggested Books for Further Studies§
- Common Stocks and Uncommon Profits by Philip A. Fisher
- A Random Walk Down Wall Street by Burton Malkiel
Test Your Knowledge: NASDAQ Global Select Market Quiz§
Thank you for reading! Remember, with great market knowledge comes great investment power! Happy trading! 🤑
