3 Quick Points to Simplify the S&P 500 Index
The king of all indices in the United States
The Standard & Poor’s 500 Index, primarily known as the S&P 500, is an index that you should know about and understand. The S&P 500 is a market-capitalization-weighted index (market-cap weighted index) of the 500 largest publicly-traded companies in the United States. The S&P 500 is one of the most mentioned and followed indices, which is why it is considered a benchmark for the U.S. stock market. The S&P 500 is operated by S&P Dow Jones Indices LLC, which is owned by S&P Global.
For a quick history lesson of how the S&P 500 became what it is today, in 1860, Henry Varnum Poor created Poor’s Publishing, which published guides to investors on the railroad industry. In 1923, the Standard Statistics Company developed its first stock market index of 233 U.S. companies and computed its value weekly. They then developed a 90-stock index that was computed daily in 1926. Eventually, in 1941 Poor’s Publishing merged with the Standard Statistics Company to form Standard & Poor’s. In 1957, Standard & Poor’s stock market index that was computed daily of 90 companies was expanded to a 500-company format and was renamed the S&P 500.
Over time, the S&P 500 grew in popularity and became the benchmark it is known as today. In addition to being a benchmark, the…
