S&P500 - 10 things to know with detail
- 1. The S&P 500 is a stock market index that measures the performance of 500 large companies listed on stock exchanges in the United States.
- 2. It is considered one of the best indicators of the overall health of the U.S. stock market and is widely used by investors and financial professionals to gauge market performance.
- 3. The companies included in the S&P 500 are selected by the S&P Dow Jones Indices committee based on factors such as market capitalization, liquidity, and industry representation.
- 4. The index is market-cap weighted, meaning that companies with a higher market capitalization have a greater impact on the index's performance.
- 5. Some of the largest companies in the S&P 500 include Apple, Microsoft, Amazon, Alphabet (Google), and Facebook.
- 6. The S&P 500 has historically provided an average annual return of around 10% over the long term, making it a popular choice for long-term investors looking to build wealth.
- 7. The S&P 500 is often used as a benchmark for comparing the performance of individual stocks or mutual funds.
- 8. The index is rebalanced periodically to ensure that it accurately reflects the changing composition of the stock market.
- 9. The S&P 500 is considered a more diversified index than the Dow Jones Industrial Average, which consists of only 30 large companies.
- 10. Investors can gain exposure to the S&P 500 through index funds or exchange-traded funds (ETFs) that track the performance of the index.