The S&P 500 is a stock market index containing 500 US-based large cap companies. Some people consider it a better representation of U.S. companies than the Dow Jones Industrial Average, which has only 30 companies. The S&P 500 is a market-capitalization-weighted. This method gives a higher percentage allocation to companies with the largest market capitalizations. It is also a float-weighted index, which means that companies’ weights are determined by the number of available shares for that company. The S&P 500 is not the only index of its kind as there are many derivative indices available to invest and that track the S&P 500.
