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What is Value Line Index?

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  • Written By: Matt Brady
  • Edited By: Jenn Walker
  • Last Modified Date: 19 August 2016
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The Value Line Index is an equal-weighted, broad-based stock index that calculates the value of roughly 1,700 stocks listed on the American Stock Exchange (AMEX), the New York Stock Exchange (NYSE), the NASDAQ, and the over-the-counter market. Value Line publishes the Value Line Investment Survey, a weekly stock analysis newsletter. The company also offers analysis and buying options for mutual funds and other securities.

Services from the Value Line Index may be accessed through mail or online subscription. Most public libraries carry subscriptions to the Value Line Investment Survey, offering a cheaper method for interested investors to access the survey’s data. If a consumer purchases the survey, he may consider asking his accountant if the expense is tax deductible.

The Value Line Index was formed in New York in 1931 by Arnold Bernhard, who began publishing the Value Line Investment Survey. Over its history, the index grew into one of the largest and most respected stock references in the world. It has been recommended by some of the most successful stock market players in history, including Warren Buffett and Peter Lynch.

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The index compares stocks on an equal platform, meaning that all stocks are evaluated on the same scale. A larger, more well-known stock is given the same treatment as a smaller, lesser-known stock. This method may make it easier for investors to compare the probable market performance of a wide variety of stocks. This method is what is referred to when Value Line is called an equal-weighted index. Equal-weighted indexes are similar to unweighted indexes.

The Value Line Composite Index is also considered a broad-based index, meaning that its list of stocks is so expansive that it qualifies as a good indicator of the market's overall movement. Value Line has stood within an elite classes of indexes that qualify as broad based, such as the S&P 500, the Wilshire 500 and the AMEX Major Market Index. Because it measures 1,700 stocks, some investors find Value Line to be a better investment tool for speculative stocks than for established ones.

Although it's been widely praised over its history, the Value Line Index has also had its share of infamy. In 2009, Value Line Index President and Chief Executive Officer Jean Bernhard Buttner, Arnold Bernhard's daughter, was charged by the United States Securities and Exchange Commission (SEC) for fraudulently billing mutual funds for brokerage services. Value Line was fined roughly $43 million U.S. Dollars (USD), while Buttner and Chief Compliance Officer David Henigson were fined $1 million and $250,000 respectively. Both were also barred from associating with investment companies.

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