S&P 500

The S&P 500 (or Standard & Poor’s) is an index of the top 500 US-listed companies by largest market value/”capitalisation”.

The bars in the above chart are known as candlesticks. Each candlestick represents the amount the S&P 500 has moved in one trading day, with the bottom of the candlestick representing the lowest value of the index, and the top of the candlestick representing the highest.

Investors can invest in the S&P 500 through a number of different methods. One can buy an index tracker (Exchange Traded Fund) that fully replicates the S&P 500 and buys all 500 companies within the fund. A buyer of said ETF would therefore have exposure to the entire index. The price of the fund will track the performance of the S&P 500 on a constant basis. Investors can also pick and choose different companies and sectors within the S&P 500 to gain partial exposure to the market.