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Standard & Poor’s S&P 500 Index is one of the traditional yardsticks used to measure performance in the stock market. But yet today, there are two very different S&P 500 Indices. The traditional S&P 500 Index is a “cap-weighted” index: the 50 largest companies in the index (measured by their market/float capitalization) are responsible for 50% of the return generated by the index. Meaning, the remaining 450 companies in the index make up only half of the total return.
There is another method, and another investment: the “equal-weighted S&P 500 Index.” This index is different in the sense that all 500 companies in the index represent 1/500th of the index. So the largest companies in the basket carry the same value as the smallest companies.
As we discuss in the podcast from September 27, 2012 (above), you will find WHY there are times you may want to consider looking at the other S&P 500 Index.
Now, if you are relying on a blog post for specific investment advice, you are making a huge mistake. Please speak with an investment adviser before making ANY investment decisions.
If you do not have an investment adviser, we encourage you to contact Mullooly Asset Management at 732-223-9000, or through our website. Under no circumstances should the content discussed here be considered specific investment advice.
Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment or investment strategy will be profitable or equal to past performance levels.
All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions, or withdrawals may materially alter the performance of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s portfolio.
You can listen to the podcast at the top of this post or download it from iTunes (search for “Mullooly” under Podcasts in the iTunes Store).