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Financial Advisor Gaithersburg MD: What is the S&P 500?

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What is the S&P 500?

Our financial advisors can lead you in the right direction for investing in your future today! First, what is the S&P 500? The S&P 500 is a stock market index based on 500 large corporations listed on the U.S. stock exchanges. The index is calculated from the market capitalizations (total market value of outstanding shares).

Companies Included

The 500 companies included in the S&P 500 are selected by a committee, which decides the companies based on a number of criteria. Some financial advisors use similar criteria in picking investments for their clients. The committee’s goal is to select companies representative of the dominant industries in the United States economy. The companies are updated periodically, in order to ensure that the index continues to be a valid representation.

Indication of the Market at Large

Like most market indexes, the S&P 500 is meant to be an indication of the market at large. The company that runs the index does not offer direct investment services. Your financial advisor can help you to choose which investments would be ideal for investing in the S&P 500 index.

Single Most Accurate Index

You may have heard numbers thrown around regarding the average return on investment in the stock market. Most of the time, these numbers are referring to the S&P 500; it truly is considered the single most accurate index to track the market overall.

If you need more information about the how to incorporate the S&P 500 into your portfolio, contact CIC Wealth today; our financial advisors are here to help.

All indices are unmanaged and investors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Past performance does not guarantee future results.