| Trading stocks on the S&P 500 means that you are | | | | S&P 500. |
| investing in the American industries mainly. The index | | | | Investors who are looking to trade on the Index can |
| is widely regarded as the best single gauge when it | | | | stock pick from leading American industries, or they |
| comes to large cap American companies, which are | | | | can reduce risk to their portfolio by investing in some |
| benchmarked with over US$3.5 trillion, and assets | | | | of the ETFs available or mutual funds. By investing in |
| comprising of approximately US$ 915 billion of this | | | | these, you can take advantage of the shares that |
| total. As the name suggests, the index has 500 | | | | include S&P 500 equities and securities. One of these |
| components, with the majority being leading | | | | ETFs trades between 300-400 million shares in a |
| American industries. In 1923, the S&Ps primary stock | | | | single day. In the US stock market today, this is the |
| market index was the S&P 90; it wasn't till 1957 that | | | | highest traded volume on any of the exchanges. |
| it became the S&P 500 index as we know it today. | | | | Stock picking and investing in these funds should |
| The index reached its highest point in 2000 during the | | | | provide you with a strong portfolio. |
| dot com era. After the bubble burst, it declined by | | | | There are a number of things for you to consider |
| 50% in the bear market that followed for two years. | | | | when buying funds on the S&P 500, since most |
| The S&P 500 has a committee, which selects what | | | | funds may look the same or have the same stocks |
| companies are allowed to list on its index. Companies | | | | in them. One thing to consider is the cost that the |
| which are not trading publicly, and that do not have | | | | brokers or investment companies charge you for |
| enough liquidity, are not allowed to list on the index. | | | | maintaining the fund. These costs will differ for each |
| When it comes to weighting the index, it is done by | | | | company, and you should choose what suits you |
| calculating the market caps number of shares that | | | | best. Bear in mind that these fees will eat into any |
| are available for public trading. When one company is | | | | profit you might get. See what other services your |
| removed from the index and another with a different | | | | broker provides, like technical analysis, stock tips or if |
| market cap takes its place, the index changes its | | | | they will provide you with material such as a stock |
| divisor accordingly to maintain the same value of the | | | | market video or books to learn about investing. |