index
IN-deks
/ˈɪn.deks/
A statistical indicator tracking changes in an economy, stock market, or price level over time relative to a baseline.
Serves as a representative barometer tracking a group of assets or metrics relative to a starting base score.
The story behind the word. In Latin, index was the word for your forefinger—the finger you use to point at things (indicare). Roman bookbinders attached paper slips hanging out of scrolls to point out titles, calling those tags indices. Economists later adopted the pointer metaphor for statistical numbers that point out market direction.
Word relationships
- indicator: 'Indicator' is any sign showing state, while 'index' is a specific numerical series calculated against a baseline.
- gauge: 'Gauge' is a measuring tool, whereas 'index' tracks statistical trends over time.
- raw data: Unprocessed individual numbers prior to compilation into a structured index.
Commonly confused with
- indicator: An indicator gives general signals, while an index is a mathematically constructed reference score.
Word family
- indexation (noun): The practice of adjusting wages or prices in line with a statistical index.
- indexed (adjective): Adjusted automatically according to an official index.
Collocations
- consumer price index
- stock market index
- composite index
- index fund
Example sentences
- "The Consumer Price Index rose by 0.3 percent last month, signalling modest inflation across key goods." Inflation tracking (Wall Street Journal)
- "Retirement investors often purchase funds that track a major stock index to achieve diversification." Stock market analysis
Memory hook
Your INDEX finger points at things—an economic INDEX points out market trends. The pointing finger that shows market direction.
When not to use
Avoid using for a single unorganized data point; an index is a mathematically constructed metric tied to a baseline.
Fun facts
- The plural of index can be 'indexes' in standard business usage, or 'indices' in formal mathematics!
Explore more words
benchmark, Consumer Price Index, foundational, percentile, cumulative, track
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