What is the S&P 500? | The S&P 500 Explained
The S&P 500 consists of the 500 largest publicly traded stocks. In this video, Titan's Emily Bice explains what it is and how you can invest in it.
The S&P 500, short for the Standard and Poor's 500 index, is a stock market index that consists of 500 of the largest publicly traded companies operating in the U.S. At a glance, the S&P 500 provides investors with a pulse on the health of the US economy and a long term overview of economic growth. Because of its depth and diversity, the S&P 500 is largely considered to be the best gauge of large U.S. companies, and even the equities market at large. The S&P 500 includes companies across 11 broad industry groups or sectors spanning everything from communications services to industrials to real estate and information technology.
The index is weighted by company market capitalization, meaning larger companies represent more of the index than smaller ones. Some big names in the S&P 500 you may have heard of include Apple, Microsoft, Amazon, Johnson and Johnson, Wal-Mart, Tesla, and JPMorgan Chase. The S&P 500 represents a basket of stocks that serve as a benchmark for many investors to follow and compare performance to. An investor cannot directly invest in the S&P 500, but there are many different vehicles that aim to track its composition and performance.
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