The performance of a key market indicator, tracked annually, provides insights into the overall health and direction of the economy. Examination of this data involves analyzing the percentage change in the index value from the beginning to the end of each calendar year. As an example, if the index started at 25,000 and ended at 27,500, the calculation would reflect a positive percentage change of 10% for that specific year.
Understanding these yearly figures is beneficial for investors and economists alike. It allows for the identification of trends, evaluation of investment strategies, and assessment of economic cycles. Historically, periods of significant growth have often been followed by corrections or periods of slower expansion, highlighting the cyclical nature of the market and the broader economy.
