The S&P 500 and How It Works
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Finance
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- History and Ownership
- How to Use the SP 500 to Make Money
(Source: Yahoo Finance S&P 500 Historical Data.) History and OwnershipThe S&P 500 was officially introduced on March 4, 1957, by Standard & Poor. McGraw-Hill acquired it in 1966. The S&P Dow Jones Indices owns it now. That is a joint venture between McGraw Hill Financial, CME Group, and News Corp, the owner of Dow Jones. The S&P Dow Jones Indices publishes over 1 million indices. How to Use the S&P 500 to Make MoneyAlthough you can't invest in the S&P, you can mimic its performance with an S&P Index fund. You could also buy shares of stocks that are in the S&P 500. Be sure to weight them in your portfolio according to the market cap, as the S&P does. You should use the S&P 500 as a leading economic indicator of how well the U.S. economy is doing. If investors are confident in the economy, they will buy stocks. Some experts believe the stock market can predict what the savviest investors think the economy will do in about six months. Besides following the S&P 500, you should also follow the bond market. When stock prices go up, bond prices go down. There are many different types of bonds. They include Treasury bonds, corporate bonds, and municipal bonds. Bonds provide some of the liquidity that keeps the U.S. economy lubricated. Their most important effect is on mortgage interest rates. To help you follow the bond market, Standard & Poor'salso rates bonds. Since the S&P 500 only measures U.S. stocks, you should also monitor foreign markets. That includes emerging markets like China and India. It's also good to keep 10 percent of your investments in commodities, like gold. They tend to hold value longer when stock prices drop. Download 23.28 Kb. Do'stlaringiz bilan baham: 
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