WEBVTT

00:00:00.000 --> 00:00:05.800 align:middle line:90%
[UPBEAT MUSIC]

00:00:05.800 --> 00:00:10.180 align:middle line:84%
The Standard and Poor's
500 Index or S&P 500,

00:00:10.180 --> 00:00:13.810 align:middle line:84%
is one of the most common
indexes for the US stock market

00:00:13.810 --> 00:00:16.600 align:middle line:84%
and is comprised
of 500 large cap

00:00:16.600 --> 00:00:20.650 align:middle line:84%
stocks representing the leading
industries of the US economy.

00:00:20.650 --> 00:00:24.850 align:middle line:84%
They are chosen for such factors
as market size and liquidity,

00:00:24.850 --> 00:00:28.510 align:middle line:84%
or in other words, how easily
an asset or security can

00:00:28.510 --> 00:00:32.110 align:middle line:84%
be bought or sold in the market
without affecting the asset's

00:00:32.110 --> 00:00:32.830 align:middle line:90%
price.

00:00:32.830 --> 00:00:36.100 align:middle line:84%
Intended to be a leading
gauge of US equities,

00:00:36.100 --> 00:00:39.160 align:middle line:84%
the S&P 500 is also
meant to reflect

00:00:39.160 --> 00:00:43.480 align:middle line:84%
the risk and return associated
with the large cap companies.

00:00:43.480 --> 00:00:47.530 align:middle line:84%
Large cap refers to companies
with a market capitalization

00:00:47.530 --> 00:00:49.480 align:middle line:90%
of more than $10 billion.

00:00:49.480 --> 00:00:53.020 align:middle line:84%
To find this value multiply
the number of its shares

00:00:53.020 --> 00:00:56.470 align:middle line:84%
outstanding by its
stock price per share.

00:00:56.470 --> 00:01:01.090 align:middle line:84%
Many people consider the S&P 500
to be a better representation

00:01:01.090 --> 00:01:04.550 align:middle line:84%
of the US market than the
Dow Jones Industrial Average,

00:01:04.550 --> 00:01:07.550 align:middle line:84%
since the latter only
includes 30 companies

00:01:07.550 --> 00:01:12.290 align:middle line:84%
while the focus of the S&P
500 is on US based companies.

00:01:12.290 --> 00:01:14.330 align:middle line:84%
There are a few companies
with headquarters

00:01:14.330 --> 00:01:16.970 align:middle line:84%
in or that are incorporated
in other countries.

00:01:16.970 --> 00:01:19.120 align:middle line:90%
[UPBEAT MUSIC]

00:01:19.120 --> 00:01:23.000 align:middle line:90%