Business and Technology

S&P 500 and Why It Matters

What is the S&P 500 and why is it so important?

The Standard and Poor’s 500 Index (S&P 500) is a section of the 500 publicly traded companies on the NYSE and NASDAQ. This index is chosen by a committee who account for market size, liquidity, and group representation of the stocks divided into 100 industry groups. The S&P 500 is commonly used as a financial market indicator because it gives a broad sense of how stocks are doing and determines the performance of many mutual funds. The index accounts for nearly 75% of the stock market. The S&P 500 has historically been a very good investment, and outperformed some of the savviest hedge funds in the past few years. The historical Index return is around 8%, but that number can be misleading due to the large variations. Also, history is no guarantee of the future, but this is still a wise investment for diversification and mitigation of risk.

Industry Groups

  • Basic Materials
  • Communication Services
  • Consumer Cyclical
  • Consumer Defensive
  • Energy
  • Financial Services
  • Healthcare
  • Industrials
  • Real Estate
  • Technology
  • Utilities

Notable S&P 500 stocks:

  • Apple Inc
  • Microsoft Corp
  • Inc
  • Exxon Mobil Corp
  • Johnson & Johnson
  • Facebook Inc
  • JPMorgan Chase & Co
  • General Electric Co
  • AT&T Inc

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