how is the nasdaq composite index constructed 
the nasdaq composite index is a market capitalization weighted index this means the index is heavily influenced by larger companies the index is one of the most heavily watched in the world the bottom linethe nasdaq composite index rose to prominence thanks to the rapid growth of the most successful companies with nasdaq listed stocks including microsoft and more recently apple and alphabet the flip side of such ling term success in an index based on market capitalization is that the nasdaq composite is very top heavy the top five companies and six stocks including both traded classes of alphabet s shares account for more than 40 of the nasdaq composite s index weight moreover high growth stocks prevalent in the index tend to be more economically sensitive and more volatile as a result when the market does well the nasdaq composite can be a standout it gained 43 6 in 2020 despite a rough march after a 35 2 surge in 2019 when the going gets rough you get its 40 5 loss in 2008 or the first four months of 2022 