What is a stock index?

    Published: 06-16-2009
    Views: 18,957
    Financial Advisor David John Marotta defines a stock index.

    David John Marotta

    David John Marotta is the President of Marotta Wealth Management, a fee-only financial planning and asset management firm in Charlottesville, Virginia. He is an oft-quoted writer and speaker on financial matters and his weekly financial column can be found at www.eMarotta.com

    Host: What is the EAFE Index?

    David Marotta: The MSCI EAFE Index stands for EAFE; Europe, Australia, and the Far East and it represent all of the foreign stocks outside of the U.

    S. in developed countries except Canada. So, a lot of advisors will invest in U.

    S. stocks, they will invest in the EAFE and then they may by Canada specifically just a sort of round out the all the developed nations. The developed countries outside the U.

    S.

    , generally earn a percent or two more than U.

    S. stocks, but they are also more volatile.