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Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades.

Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated October 27, 2020

What is a Composite?

A composite is a grouping of securities, indexes or other items.

How Does a Composite Work?

One of the most well-known composites in the finance world is the Dow Jones Composite Average, which is  a price-weighted average of the 65 companies that compose the Dow Jones Industrial Average, the Dow Jones Transportation Average, and the Dow Jones Utility Average. The index is price-weighted, meaning that the stocks with the highest prices have the most influence on the index.

Why Does a Composite Matter?

Composites are broad measures and usually a convenient way to evaluate the performance of a wide array of securities, other indexes or other items. For instance, the Dow Jones Composite Index gives a good indication of the overall direction of the largest companies in the United States: It includes some of the titans of the transportation, utility, financial services, technology, retail, entertainment and consumer goods industries. As such, the index is not just a measure of market performance; some consider it an economic indicator as well.

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At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Composite.
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Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Composite, then please ask Paul.

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