Background
Financial Times Share Indexes represent a collection of stock market indices published by the Financial Times of London. These indexes are pivotal tools in financial analysis, investment decisions, and economic assessments.
Historical Context
The concept of share indexes by the Financial Times stems back to the early 20th century, mirroring the growing need for aggregated market data. Over the years, they’ve expanded to include various indices catering to different sectors and investment interests.
Definitions and Concepts
Financial Times Industrial Ordinary Share Index: One of the older indices which tracked leading industrial companies.
FTSE 100 (Footsie): The Financial Times-Stock Exchange 100 Share Index is among the most prominent, representing the top 100 companies by market capitalization on the London Stock Exchange (LSE).
Employing these indexes helps investors gauge market trends and economic health.
Major Analytical Frameworks
Classical Economics
In classical economic theory, one could use the indices to demonstrate the relationship between share prices and market operations.
Neoclassical Economics
Neoclassical economists might evaluate how efficiently the share indexes reflect all available information and contribute to a well-informed market.
Keynesian Economics
Keynesian analysts could use movements in these indices to correlate with overall market and economic activities, stressing the influence of macroeconomic policies.
Marxian Economics
From a Marxian perspective, the indices may be analyzed to explore capital accumulation and market fluctuations.
Institutional Economics
Institutional economists might look at these indices to critique how market institutions and capitalist structures influence business cycles.
Behavioral Economics
Behavioral economists could study the herding behaviors and market psychology reflected in these indices.
Post-Keynesian Economics
Post-Keynesian analysis would focus on how these indices are affected by endogenous market risks and economic policies.
Austrian Economics
Austrian economists might use these indices to analyze the impact of entrepreneurship and individual company actions on broader economic conditions.
Development Economics
In development economics, these indices can be seen as measures of economic growth and development effectiveness.
Monetarism
Monetarists might study these indices to understand how changes in the money supply impact stock prices.
Comparative Analysis
Comparing these indices to other global indices, like the S&P 500 or Nikkei 225, can provide insights into relative market performance and economic health across different regions.
Case Studies
Historical data trends from critical economic periods, such as the 2008 financial crisis, can show how these indices respond to global economic disruptions.
Suggested Books for Further Studies
- Global Investing for Dummies by Gary Tilkin
- The Investors’ Guide to the United Kingdom by Jonathan Reuvid
- Market Indicators: The Best-Kept Secret to More Effective Investing and Trading by Richard Sipley
Related Terms with Definitions
- Stock Market Index: A measurement of the value of a section of the stock market.
- Market Capitalization: The total value of all a company’s shares of stock.
- Blue Chip Stock: Shares in large, industry-leading companies.
- Volatility: Statistical measure of the dispersion of returns for a given security or market index.
