S&P 500 Index

The S&P 500 (Standard & Poor's 500) is America's premier stock market index, tracking 500 of the largest publicly traded companies in the United States. These companies represent approximately 80% of the total US stock market capitalization, making the S&P 500 the definitive benchmark for US equity performance.

Index Overview

Created in 1957, the S&P 500 includes companies from all major sectors of the US economy. Unlike the Dow Jones Industrial Average which only tracks 30 companies, or the Nasdaq which focuses on technology, the S&P 500 provides a comprehensive view of the American corporate landscape. Companies are selected based on market capitalization, liquidity, and sector representation.

Investment Considerations

S&P 500 index funds and ETFs are among the most popular investment vehicles for long-term investors. Historical returns have averaged approximately 10% annually over the past century, though individual year performance varies significantly. When investing in S&P 500 companies, consider tax implications for both capital gains and dividends.