why are indexes useful 
indexes are useful for providing valid benchmarks against which to measure investment performance for a given strategy or portfolio by understanding how a strategy does relative to a benchmark one can understand its true performance indexes also provide investors with a simplified snapshot of a large market sector without having to examine every single asset in that index for example it would be impractical for an ordinary investor to study hundreds of different stock prices in order to understand the changing fortunes of different technology companies a sector specific index can show the average trend for the sector 