S&P 500 index is a market capitalization-weighted index of 500 of the largest publicly traded companies in the US. It covers a diverse range of 500 industries.
The S&P 500 index typically consists of 500 of the top U.S. corporations, though the exact number may change. Around 80% of the available U.S. market capitalization is represented by the S&P 500.
The S&P 500 index is calculated by taking the total market value of all the stocks in the index and dividing it by a divisor that adjusts for stock splits, dividends, and other factors.
You may invest in the S&P 500 index by purchasing shares of a mutual fund or exchange-traded fund (ETF) that passively tracks the index. Brokerage and fund company offers a variety of S&P 500 funds.
Index funds represent all sectors of the US stock market, they are diversified investments with relatively low market risk. The high number of constituents of the S&P 500 further reduce exposure to market risk.
The cost to invest in the S&P 500 can vary depending on several factors, such as the brokerage firm you use & the type of investment account you open.
S&P 500 has generated a solid return for investors over the long term. Before investing, it's important to consider your investment goals, risk tolerance and time horizon.