Invest Safely in the S&P 500 Index
The stock market has consistently been a worthwhile investment for experienced investors who know what to look for in a company. It can be a much riskier investment for an inexperienced investor.
What is the S&P 500 Index
“S&P” stands for Standard and Poor. It was created in 1917 from a merging of two companies. Standard Statistics merged with Poors Publishing to form a US credit rating agency. S&P is considered the largest of the Big Three credit rating agencies, which also includes Fitch Ratings and Moody’s Investor Service.
In 1957, Standard and Poors created an index based on the performance of the top 500 US companies. It’s a free-float, capitalization-weighted index, and being listed in the S&P 500 is a goal for all publicly traded US companies. It almost guarantees a listed company’s stock will rise because all S&P 500 index funds must invest in the listed companies.
The index is based on the performance of about 500 of the world’s largest publicly traded companies across a wide range of industries. Instead of investing in the performance of a single company, you’re investing in the performance of hundreds. This reduces the risk to investors considerably, which is why the index is so popular with less experienced investors.
It includes the performance of tech giants like Apple, Microsoft, and Tesla. You’ll benefit from the wisdom of Warren Buffet and his conglomerate of Berkshire Hathaway and enjoy the steady health care increases provided to the index by Johnson & Johnson.
The S&P 500 is an index, not an investment mechanism. So, while you may own a piece of all the companies represented by the index, your returns come from a fund that invests in the same companies appearing in the S&P 500. However, you can check the performance of the S&P 500 to find out how your investment is performing because they should be identical.
Benefits of Investing in the S&P 500
The S&P 500 represents 500 of the largest publicly traded US companies. It also represents 80% of the US stock market capitalization. The wide range of the index is an excellent benchmark for the performance of the US stock market.
For the investor, the ability to invest in a convenient, low-cost index fund based on a wide variety of the cream of US companies can be enticing. It offers a greater degree of stability than investing in the companies one by one. Investing in a professionally-managed fund is also safer than investing in a number of companies on your own.
Invest with Investors Trust
Investors Trust offers a savings plan based on the performance of the S&P 500 index. It has unique advantages over other savings plans because there is no downside risk. Your principal is protected with structured notes provided by highly-rated financial institutions. The plan is also flexible and provides 10, 15, and 20-year terms to fit your individual needs. Contact Investors Trust to find out more about investing in the S&P 500 index.