How to invest in the NYSE Amex Composite Index

Looking at investing in the United States stock market, but want to put your money in an index away from the major names?
Updated: Jan 24, 2022
Tip: our preferred broker is, eToro: visit & create account

It might be worth checking out the NYSE Amex Composite Index. There are a bunch of different ways to invest in the XAX Index of the American Exchange (also known as AMEX), so we’ll guide you through the process so you can do it yourself.

Where can I buy into the NYSE Amex Composite Index?

1
Min. Deposit
$ 10
Promotion
User Score
10
Up to $240 bonus!
Deposit with ACA, Wire, Pay with my bank
Invest for dividends and get payout on stocks on Ex-Dividend day
Start Trading
Payment Methods:
Bank Transfer, Wire Transfer
Full Regulations:
CySEC, FCA
Investoo Ltd is compensated if you access certain of the products or services offered by eToro USA LLC and/or eToro USA Securities Inc., as applicable. This compensation incentivizes Investoo Ltd to describe those products and services in favorable terms. Any testimonials contained in this communication may not be representative of the experience of other eToro customers and such testimonials are not guarantees of future performance or success.
2
Min. Deposit
$ 100
Promotion
User Score
10
Trade out-of-hours on over 70+ US stocks
Get exposure to a wide range of popular UK, US and international stocks
Enjoy flexible access to more than 17,000 global markets, with reliable execution
Start Trading
Payment Methods:
Bank Transfer, Credit Card, Debit Card, PayPal
Full Regulations:
ASIC, FCA, FINMA, is a licensed bank (IG Bank in Switzerland)
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
3
Min. Deposit
$ 0
Promotion
User Score
9.5
$0 commission and $0 Options contract fees
Upgraded research with advanced charts
Smart Menus for faster trades
Start Trading
Payment Methods:
Full Regulations:

What is the NYSE Amex Composite Index?

It is an index that tracks the performance of stocks listed on the NYSE American exchange (also known as the American Exchange or AMEX). The exchange is a small- and mid-cap stock exchange based in New York City. By following the stocks on this exchange, the index consists of smaller names than the companies found on better-known US indices such as the S&P 500 and Dow Jones Industrial Average. The index offers opportunities for investors to try and buy low on stocks that are sometimes just at the beginning of their growth cycle.

Is it a good investment?

Taking a shot at more obscure stocks can certainly have its upside, especially if you consider the paths to success taken by some smaller stocks of the past that went to become market powerhouses. On the other hand, sometimes stocks are obscure for a reason, and the growth that investors hope for never really arrives. Viewed in that light, the index could make for an interesting investment that could see big returns, but would also likely have less stability than putting your money in another of the larger US indices.

How do I invest in the NYSE Amex Composite Index?

Here are three steps you should take when investing:

  1. Choose an investment type
  2. Use our top tips to succeed
  3. Choose a platform to invest with

1. Choose investment type

The investment type you use will depend on multiple factors, such as how much each approach charges in transaction fees, and the quality and quantity of investment advice you want to get. Here’s a rundown of the methods you can use to invest in the index.

ETFs

An ETF (exchange-traded fund) is an investment fund traded on a stock exchange during regular stock market hours, a feature that some other investment methods don’t offer. ETFs consist of a collection of assets such as commodities, or a collection of stocks such as the stocks you’ll find in the NYSE Amex Composite Index. An ETF gives you the benefit of diversification, without the burden of having to pay high transaction or management fees.

Individual stocks

If you want to focus on the top-performing stocks in the index, you can buy each of the index’s stocks in separate trades. This allows you to evaluate each stock, then sell to reduce your holdings until you own only the top-performing stocks within the index.

The problem with this approach is that you’ll incur heavy transaction fees making a large number of separate trades to buy stocks, then even more transaction fees when you want to sell the stocks you don’t wish to hold long-term. This approach is generally not advised with composite indices, as the number of stocks they follow is so large that the amount of time and money used up buying individual stocks is not a very efficient way of investing in them.

Mutual funds

A mutual fund is an investment fund that’s run by a professional money manager. You can invest in the fund either through a broker or through the company that administers the fund. The money manager pools capital from many different investors then invests it into different assets in order to generate returns for everyone who has put money into the fund. An NYSE Amex fund (also called an index fund) allows you to invest in all of the stocks within the index at once. 

There are a few drawbacks to this approach. You can only buy stocks at the end of the stock market’s trading day, meaning you won’t be able to start trading during the regular trading hours. Also, mutual funds charge higher fees than ETFs do. So if you’re going to invest in a fund, consider a buy-and-hold investment approach that avoids frequent transactions, since a mutual fund is both more difficult and more expensive to trade than an ETF.

2. Use our top tips to be a successful investor

Before you invest, review Invezz’s top investment tips:

  • Do your research. It takes a second to make a trade, but a lot longer to become a consistently successful investor. You can start practicing that level of commitment by studying the index’s recent and historical performance, as well as how the index compares to other investments. After that, you’ll want to plot out the types of gains you’re hoping for in a given time period, as well as the size of the losses you’re prepared to handle. The more prepared you are to invest, the better equipped you’ll be to cope with emotions such as fear and greed which can cloud an unprepared investor’s judgment.
  • Set a budget. Consider both your risk tolerance and the amount of money you can afford to lose in order to create a strict budget before investing. One way to manage risk is to set a stop-loss order after you make your investment so that you can limit the size of any potential losses. Without a well-thought-out budget, you could expose yourself to more risk than you can handle.
  • Select the right platform. Pick an investing platform based on your specific investment goals. If all you care about is getting the lowest transaction fees then you will want to look for a broker, whereas if you want the benefits of specialised investment advice, you’ll want to opt for a financial advisor. So it’s vital that you figure out your goals before you look for a platform to handle your investments
  • Grow your investments gradually. If you’re just starting off as an investor, consider starting slowly by investing just a small amount of money at first. As you gain experience and expertise, you can invest more money. In investing, as with many things in life, it’s usually a case of slow and steady wins the race.
  • Think long-term. If you’re trying to land the biggest possible gains, buying and holding index long-term could be a fruitful plan. If you’re going to try that strategy, make sure to research the market and ensure conditions are in your favour.

3. Choose a platform to invest with

Here’s a rundown of the options you can use to invest:

  • Brokers & trading platforms. Online stockbrokers offer easy-to-use tools that make for a very natural and straightforward trading process, even when it comes to trading. However, most online brokers aren’t equipped to provide in-depth investment advice that some investors might desire. If you’re looking for higher-level investment guidance, you might want to consider other options.
  • Robo advisors. Robo advisors execute trades using algorithms, which keeps transaction costs relatively low (although still more than you’ll find with a broker). Though the trade execution process is automated, some robo advisors will still allow you to discuss your investment strategy with a human being. That said, robo advisors don’t quite offer the same level of investment guidance that a top financial advisor does.
  • Financial advisors. Financial advisors provide the highest level of investment advice among all of these options, but at a cost. They’ll review your financial goals, explain many different investment options, and continue to help you in the months and years to come. All of that customer service naturally comes with a higher price tag, which may not be worth it in this case, as investing in the NYSE American Composite Index is relatively simple.
  • Banks. Investing in the index with your bank gives you the convenience of storing all your financial ventures (for example your checking and savings accounts, mortgage, line of credit, and investments) with one institution. The problem is that banks charge high fees without providing the level of service that dedicated financial advisors offer. So unless convenience is an absolute must, you’re usually better off using a different approach.
1
Min. Deposit
$ 10
Promotion
User Score
10
Up to $240 bonus!
Deposit with ACA, Wire, Pay with my bank
Invest for dividends and get payout on stocks on Ex-Dividend day
Start Trading
Payment Methods:
Bank Transfer, Wire Transfer
Full Regulations:
CySEC, FCA
Investoo Ltd is compensated if you access certain of the products or services offered by eToro USA LLC and/or eToro USA Securities Inc., as applicable. This compensation incentivizes Investoo Ltd to describe those products and services in favorable terms. Any testimonials contained in this communication may not be representative of the experience of other eToro customers and such testimonials are not guarantees of future performance or success.

What should I do now? 

If you’ve made up your mind to invest in the NYSE American Composite Index, then all you need to do is head over to your chosen platform’s website, decide whether you want to buy an ETF, a mutual fund, or every individual stock in the NYSE Amex Composite Index in a bunch of separate trades, then click buy. After that, track your investment closely, as market conditions can shift quickly and dramatically.

Try some of our investment courses for beginners

Not feeling ready to invest? That’s totally fine. You can improve your investing skills by reading the easy-to-follow educational investing courses and news updates that we offer right here at Invezz.com.

Stocks Courses
If our Stock Markets 101 course was your introduction to stock market investing, think of the Stock Investing course as the next step, your intermediate-level guide to investing. Just remember, this is not a get-rich-quick scheme and takes time, patience, and emotional stability.
Stocks Courses
Luckily, it’s far easier to begin trading than it was in the 90s when Wall Street and big money were the only options. Get started with our introduction to stock trading. You’ll come away feeling more confident about the task ahead, while acquiring a base knowledge of all the most…

Sources & references
Risk disclaimer

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

Harry Atkins
Financial Writer
Harry was a Financial Writer for Invezz, drawing on more than a decade writing, editing and managing high-profile content for blue chip companies, Harry’s considerable experience… read more.