S&P 500 Index – Standard & Poor’s 500 Index Definition;
The S&P 500 or Standard & Poor’s 500 Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies. The index is widely regarded as the best gauge of large-cap U.S. equities. Other common U.S. stock market benchmarks include the Dow Jones Industrial Average or Dow 30 and the Russell 2000 Index, which represents the small-cap index.
How to Calculate a Company’s Weighting in the S&P 500
- Calculate the total market cap for the index by adding all the market caps of the individual companies.
- The weighting of each company in the index is calculated by taking the company’s market capitalization and dividing it by the total market cap of the index.
- For review, the market capitalization of a company is calculated by taking the current stock price and multiplying it by the company’s outstanding shares.
- Fortunately, the total market cap for the S&P as well as the market caps of individual companies are published frequently on financial websites saving investors the need to calculate them.
SP500 Companies are a great indictor how the global market is performing and bear in mind – besides China US is the biggest consumer of the world. If US & CHINA cough – ALL OF US IN ASIA Will GET FEVER!!!
NOW THAT YOU KNOW WHAT IS SP500 – TIME TO LEARN HOW TO USE IT TO YOUR ADVANTAGE?
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Article by: FINWAZE