What is the Standard & Poor's 500 (S&P 500)?

One of the most significant indices on the world’s trading arena, the Standard & Poor’s 500 is commonly used by investors to define the right market entry moments. Being composed of the largest corporations, it reflects the state of the global economy.

Is the S&P 500 a float-weighted index?

The S&P is a float-weighted index, meaning the market capitalizations of the companies in the index are adjusted by the number of shares available for public trading. Because of its depth and diversity, the S&P 500 is widely considered one of the best gauges of large U.S. stocks, and even the entire equities market.

Why is the S&P 500 important?

Here's an explanation for . The Standard & Poor’s 500 index, or S&P 500, is a collection of about 500 of the largest publicly traded companies in the U.S. It’s an ironic name for one of the best collections of stocks in the world, one that has returned investors about 10 percent annually over long periods of time.

When did the S&P 500 index start?

The S&P 500 Index (SPX), formerly called the Composite Index (and later Standard & Poor’s Composite Index), had been launched on a small scale in 1923. It began tracking 90 stocks in 1926 and expanded to 500 in 1957.