All-Ordinaries Stock Index: An Overview of Australia's Benchmark Index
Introduction to the All-Ordinaries Stock Index
The All-Ordinaries (also known as "Kangaroos") is the benchmark stock index for Australian equities, representing the 500 most important publicly traded Australian corporations. Managed and maintained by the Australian Stock Exchange (ASX), the index covers a significant part of the country's market, constituting over 95% of the value of all shares listed on the ASX.
Historical Perspective and Composition
The All-Ordinaries Index was initiated in January 1980 with a base index of 500. Since then, it has witnessed substantial growth. If the index is at 5000 points, it implies that the value of stocks in the All-Ords has multiplied tenfold since its inception. The All-Ordinaries Index underwent restructuring on 3 April 2000, aligning it with the top 500 companies by market capitalization.
All-Ordinaries Index Inclusion Requirements
To become a part of the All-Ordinaries index, a company must fulfill specific criteria. These include having a market value of at least 0.2% of all domestic equities quoted on the ASX and maintaining an average turnover on the ASX of at least 0.5% of its quoted shares per month.
Function and Impact of the All-Ordinaries Index
A Comprehensive Indicator of Market Performance
The All-Ordinaries Index is more than a mere statistical measure. It serves as a significant indicator of overall share market performance, reflecting the current trends in the market. Furthermore, it stands as a valuable record of share market cycles and helps gauge the market's response to various economic events and situations.
Reflection on Economic Health
Beyond its role as a market indicator, the All-Ordinaries index is often considered a barometer of the economy's current and future health and wealth. Its fluctuations provide insights into the underlying economic conditions, making it a valuable tool for investors, policymakers, and economists alike.
How the All Ordinaries Index is Calculated
The All Ordinaries Index's calculation is rooted in the aggregate market value (AMV) of the selected companies quoted on the ASX. The market value, or market capitalization, for each company within the portfolio is derived from multiplying the number of shares on issue by the current price per share. The AMV of the All Ordinaries Index share portfolio is the sum of these individual market values.
The index was given a base value of 500.0 at the end of trading on the last trading day in December 1979. Movements since then are calculated by multiplying the index by the ratio of current to past AMVs.
The All-Ordinaries Stock Index, symbolizing Australia's vibrant market, serves as a comprehensive benchmark for Australian equities. Its rich history, inclusive nature, and meticulous calculation method have made it a reliable indicator of not only the share market's performance but also the broader economic conditions. As it continues to evolve and adapt to the market's dynamic nature, the All-Ordinaries Index remains an essential reference point for investors and economists, bridging the market's complexities with simplicity and precision.
The fundamental premise of technical analysis lies in identifying recurring price patterns and trends, which can then be used to forecast the course of upcoming market trends. Our journey commenced with the development of AI-based Engines, such as the Pattern Search Engine, Real-Time Patterns, and the Trend Prediction Engine, which empower us to conduct a comprehensive analysis of market trends. We have delved into nearly all established methodologies, including price patterns, trend indicators, oscillators, and many more, by leveraging neural networks and deep historical backtests. As a consequence, we've been able to accumulate a suite of trading algorithms that collaboratively allow our AI Robots to effectively pinpoint pivotal moments of shifts in market trends.
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