The S&P 500 is a stock market index that includes 500 of the largest U.S. companies

What is the S&P 500?

Views 23KNov 1, 2023

Key Takeaways

The S&P 500 is a stock market index that includes 500 of the largest U.S. companies
The S&P 500 has returned more than 12% annually on average（as of Aug.2020）

Understanding the S&P 500

You've probably heard news reporters saying things like "The S&P 500 is up five points" or "The S&P 500 is down six points." But what exactly does the S&P 500 mean?

The S&P 500 whose full name is the Standard and Poor's 500 index, is a stock market index that measures the performance of 500 leading companies in the U.S.

The S&P 500 is generally considered as the best indicator of how U.S. stocks are performing overall. It includes stocks across 11 sectors of the economy and represents about 80 percent of the total value of all stocks trading in U.S. markets. You'll recognize some household names, including some of the popular FAANG (Facebook, Amazon, Apple, Netflix, Google）

Those great companies make the S&P 500 become one of the most successful stock indexes in the world. From its inception in 1957 up until the end of 2020, the index has returned more than 12% annually on average.

However, it doesn't mean investing in the S&P 500 is risk-free. For example, after the financial crisis in 2008, the S&P 500 saw a decline in value of about 37%. Earning a 12% average annual total return requires a long-term investing mindset and a willingness to ride out market volatility.

This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeline for any particular purpose of the above content.

Moomoo is a financial information and trading app offered by Moomoo Technologies Inc.

In the U.S., investment products and services available through the moomoo app are offered by Moomoo Financial Inc., a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and a member of Financial Industry Regulatory Authority (FINRA)/Securities Investor Protection Corporation (SIPC).

In Singapore, investment products and services available through the moomoo app are offered through Moomoo Financial Singapore Pte. Ltd. regulated by the Monetary Authority of Singapore (MAS). Moomoo Financial Singapore Pte. Ltd. is a Capital Markets Services Licence (License No. CMS101000) holder with the Exempt Financial Adviser Status. This advertisement has not been reviewed by the Monetary Authority of Singapore.

In Australia, financial products and services available through the moomoo app are provided by Futu Securities (Australia) Ltd, an Australian Financial Services Licensee (AFSL No. 224663) regulated by the Australian Securities and Investment Commission (ASIC). Please read and understand our Financial Services Guide, Terms and Conditions, Privacy Policy and other disclosure documents which are available on our website https://www.moomoo.com/au .

In Canada, order-execution only services available through the moomoo app are provided by Moomoo Financial Canada Inc., regulated by the Canadian Investment Regulatory Organization (CIRO).

In Malaysia, investment products and services available through the moomoo app are offered through Futu Malaysia Sdn. Bhd. ("Moomoo MY")regulated by the Securities Commission of Malaysia (SC). Futu Malaysia Sdn. Bhd. is a Capital Markets Services Licence (License No. eCMSL/A0397/2024) holder. This advertisement has not been reviewed by the SC.

Moomoo Technologies Inc., Moomoo Financial Inc., Moomoo Financial Singapore Pte. Ltd.，Futu Securities (Australia) Ltd, Moomoo Financial Canada Inc., and Futu Malaysia Sdn. Bhd. are affiliated companies.