General information
The Top 500 in the USA. The S&P 500 (Standard & Poor's 500, SPX) comprises the 500 largest US companies by market capitalization. The index is one of the three most important U.S. indices and, due to its broad diversification, gives a good indicator of how companies and the economy are doing in the U.S..
Due to the international fame, many people from all over the world look at the development of the S&P 500 every day, because the US stocks often give strong impulses on how stocks from other countries are doing.
Calculation of the index
Unlike the Dow Jones or Dax. The S&P 500 is calculated as a price index and therefore does not include dividend payments. Stock splits also have no distorting effect on the price trend. The calculation is based on the so-called value index formula. This calculation takes into account the performance of each individual share. However, larger companies have more influence on the performance than smaller companies.
The calculation of the index is updated every second, at least during the trading hours of the New York Stock Exchange. This is open from 15:30 to 22:00 German time. In addition, the S&P500 is the basis for the CBOE Volatility Index.
The largest positions in the S&P 500
The top 500 in the USA. The S&P500 was established by Standard & Poor's and includes the 500 largest companies in the country by market capitalization. However, there are certain inclusion criteria that must be met for a company to be listed in the S&P 500. Merely having a high market capitalization is not enough.
Overview of Index History
Merger. In 1923, Standard Statistics published an index with 233 stocks, which was further developed until the merger in 1941. Standard Statistics and Poor's Publishing merged and the S&P 500 was published on March 4, 1957. The performance was calculated back to 1928 with daily prices to 1918 with weekly prices and to 1789 with monthly prices.
The base years are 1941 to 1943 with a value of ten index points. Since then, the index has reached many milestones. On March 24, 1995, it reached 500 points for the first time and on February 2, 1998, it reached 1,000 points.
The best and worst days of the S&P 500
By far the best day was March 15, 1933, when the S&P 500 gained 16.6%, but this was due to the long trading pause. Since March 3, 1933, the stock exchanges had been closed due to the inauguration of Franklin D. Roosevelt closed. Rank 2 to 4 were in the years 1929 to 1932. On October 13, 2008, the S&P 500 increased by 11.5%, which occurred in the wake of the financial crisis.
The worst day was October 19, 1987, better known as Black Monday, with a price slide of 20.4%. The stock market crash was almost unexpected, after many years of nothing but upward movement. The other entries deal with the period leading up to the world economic crisis of 1929. price slides of 9 to 12 %.
Historical share price development
Safe market. The US stock market has always been considered the most solid and successful market for investors around the world. Value stocks in health care, industry or consumer goods have been able to generate top returns over long periods of time. The technology sector has served as a key growth driver in recent years.
Significance for private investors
The best from the USA. Since its inception, the S&P 500 has always produced good returns if you have been in it for the long term. This is a good middle ground between the Dow Jones and the Nasdaq 100. The Dow Jones mainly represents value stocks and is therefore not as volatile as the Nasdaq 100, because it mainly lists growth companies. The S&P 500 combines both, which is also reflected in the return.
