The NASDAQ Composite Index tracks the performance of more than 3000 key stocks listed on the NASDAQ exchange.
It is the primary index of the NASDAQ exchange. The index was launched in 1971 – the same year in which the NASDAQ exchange was established.
Because the NASDAQ Composite is based on market capitalization rather than fundamentals, it is primarily useful for tracking trends in the stock market rather than the intrinsic value of its underlying stocks. As with other indexes which track market capitalization, the stocks underlying the NASDAQ Composite may be overvalued or undervalued depending on investor sentiment.
See also: Fundamental analysis
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