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The S&P 500 (INDEX: ^GSPC ) is a capitalization-weighted index whose components are weighted by the total market value of outstanding shares. Because it's weighted this way, companies that are disproportionately larger -- like Apple (Nasdaq: AAPL ) and Exxon (NYSE: XOM ) -- have the most influence over the index, while those on the smaller end, like MAKO Surgical (Nasdaq: MAKO ) and First Solar (Nasdaq: FSLR ) , have a much lower weighting. In the following video, Fool.com analyst Austin Smith goes over everything that investors need to know about the S&P 500.
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Report this Comment On September 25, 2012, at 12:41 AM, PepeShalamar wrote:
I was surprised to see this article on The Motley Fool, considering how many errors are in the article. Not sure where the author of this article got his information from.
The S&P 500 is a stock market index containing the stocks of 500 American Large-Cap corporations. The S&P 500 index is NOT made up of the 500 largest corporations in the U.S.
In 2005, the Index was changed to be "float" weighted - the index weighting is determined by the amount of shares available for public trading.
It's great that The Motley Fool owns 3 of the 4 stocks mentioned in the article. Won't be using this site as a reference for anything anymore.
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