What is the S&P 500?
A basket with the 500 biggest companies in the United States. When it goes up, most of those companies had a good day.
🧺 What is an index?
An index is like a basket with tiny pieces of lots of companies. Instead of looking at them one by one, the index tells you with a single number whether they did well or badly all together. That's why it's measured in points, not in money.
📖 Its story
Before 1957, Standard & Poor's already had an index, but it only followed 90 companies. On March 4, 1957, they grew it to 500 big companies. Computers back then could finally do all that math super fast.
⚙️ How it works
Picture a basket with a tiny piece of 500 companies: tech, banks, food, health and much more. The S&P 500 measures how much that whole basket is worth. Bigger companies count more in the basket than small ones.
🤯 Fun fact
It's so important that in 1993 the first US fund you can buy just like a stock (an ETF) was created to copy it. It's called SPY.
🎓 For older kids
The 500 companies in the S&P 500 are worth about 80% of all the companies listed in the United States. That's why lots of people use it to say whether "the stock market" had a good or bad day.
🧠 Did you get it?
How many companies are in the S&P 500?
🗂️ Quick facts
- Born: March 4, 1957
- Created by: Standard & Poor's (today S&P Dow Jones Indices)
- Where: United States
- Has: 500 companies
🎮 Play with it
Build your basket on the Monitor and compare it with the index: did you beat the market?
Build my basketJust for learning: not an investment recommendation.