Indexing

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(1) Creating tables (indexes) that point to the location of folders, files and records. Depending on the purpose, indexing identifies the location of resources based on file names, key data fields in a database record, text within a file or unique attributes in a graphics or video file. See index, indexed search and desktop search.

(2) Creating timing signals based on detecting a mark, slot or hole in a moving medium.

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1. weighting one’s portfolio to match a broad-based index such as Standard & Poor’s so as to match its performance—or buying shares in an Index Fund.

2. tying wages, taxes, or other rates to an index. For example, a labor contract may call for indexing wages to the consumer price index to protect against loss of purchasing power in a time of rising inflation.

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1. The adjustment of the weights of assets in an investment portfolio so that its performance matches that of an index.

2. Linking movements of rates to the performance of an index.

Investopedia Says:
1. Indexing is a passive investment strategy. An investor can achieve the same risk and return of an index by investing in an index fund.

2. Examples of rates that could be linked to the performance of an index are wages or tax rates.

Related Links:
Get to know the most important market indices and the pros and cons of investing in them. Index Investing
These funds don't all match index returns. Find out how to avoid costly surprises. The Hidden Differences Between Index Funds
Indexes can track market trends, but they're not always reliable. Can you trust them? The ABCs Of Stock Indexes
Indexes are a hands-off way for investors to access the markets, but in some cases, nothing beats active investing. 5 Reasons To Avoid Index Funds