what is SNP 500 a market index is an Investment Portfolio that aims to represent a certain segment of the stock market some Market indexes include the do Jones Industrial Average d i j a the NASDAQ composite index and of course the standard and ERS 500 Index otherwise known as the SNP 500 the SNP 500 tracks the performance of about 500 high value companies in the United States and therefore aims to represent the performance of the US Stock Market and overall US economy since so many companies are included in the SNP 500 Index many consider it a great way to diversify an Investment Portfolio what companies are included in the SNP 500 let us see a committee evaluates companies quarterly and includes in the SNP only those companies that fulfill a long list of criteria for example companies included in the SNP must be based in the US listed on the US exchange offer stock and have a historical record of positive earnings but one of the better known prerequisites is that the company must have a market capitalization of at least $8.2 billion market capitalization on or market cap is a fancy way of seeing the value of a company's outstanding shares mathematically the market cap is known as the number of shares outstanding multiplied by the price of a single share due to this Criterion the SNP 500 is known for representing only large market capitalization or large cap companies also the SNP 500 is considered a capitalization weighted index in simpler words the companies with the largest market cap have a larger effect on the overall value of the SNP 500 a lot of well-known companies such as Apple Amazon and Microsoft are included in the SNP 500 however popularity is not a requirement and lesser known companies are also included regardless the companies within the SNP aim to represent 11 business sectors energy real estate utilities communication Services materials Industrials Consumer Staples Health Care financials consumer discretionary and Technology ology let's go through history of uh the SNP 500 despite SNP 500 popularity today the index fund was not the first of its kind the do Jones Industrial Average index predates the Inception of the SNP 500 by many years daa or D was created in 1896 and comprised 12 companies representing the industrial sector the concept of the SNP 500 did not emerge until 1926 when the standard statistics company created and index consisting only 90 stocks at the time it was called the composite index in 1941 standard statistics merged with poor publishing to become standard and poor and established it itself as a company specializing in Pro providing indexes and Market data then in 1957 standard and poers formalized the S&P 500 Index we see today the index included about 500 companies compared to the original 90 over time the SNP 500 has accurately reflected in the US economy the index saw spikes in value during economic booms and dips during recessions since it its Inception the SNP has provided higher returns than other major assets and is seen as a SA for investment by the financial Community investing in the S&P 500 most measor brokerages and investing perform platforms offer the opportunity to invest in an S&P 500 Index Fund including public spdr and uh SNP 500 ETFs trust spy Ward SNP 500 ETF Vu and I Shar score S&P 500 ETF are just a few examples of S&P 500 funds available for investors people often invest in indexes that track the S&P 500 because the funds represent a diverse s ction of large cap companies an index fund that includes stock from various Industries and sectors is often seen as less risky because its success isn't reliant on a single company or Trend risk a or first time investors may find an S&P 500 Index to be a good place to start their investing Journey average returns of the S&P 500 as mentioned the S&P 500 follows the same patterns of the US economy and therefore experiences periods of growth and uh depression for example after the financial crisis in 2008 the S&P saw a decline in value of about 37% on the contrary in 2019 the S&P saw an increase in value of about 31% that being said from its Inception in 1957 up until the end of 2019 the index has been has seen an annualized average return of about 10% this tends to be higher than the returns of other assets but like other Investments Market timing is everything if someone invests at the wrong time the returns may not be so favorable oh